101539  |  INF903J01173  |  4 star  |  Bronze

NAV

$ 499.89

1-Day Total Return

-0.14
%
INR | NAV as of 10/18/2017 9:30:00 AM | 1-Day Return as of 18 Oct 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

56.6 bil

Expenses

2.38%

Fee Level

--

Turnover

31%

Status

Open

Min. Inv.

5,000

30-Day SEC Yield

--

Category

Small/Mid-Cap

Investment Style

Mid Growth
Author
Morningstar's Take | 05/04/2017
by Kavitha Krishnan

The fund house is witnessing a lot of changes on the people and strategy front, and we’d like to see it stabilise over the long term before we build more conviction on the fund.

S. Krishnakumar has been managing this fund since November 2012. We believe that he is a proficient manager in the small- and mid-cap space and invests in fundamentally sound stocks with positive growth prospects, good pricing power and stable cash flows. Krishnakumar is valuation-conscious while investing in stocks, but is willing to stay invested in companies with higher valuations if longer-term growth prospects appear favourable.

The investment style is essentially bottom-up with a buy-and-hold philosophy on high-conviction names. Krishnakumar’s in-depth understanding of companies and background in researching small- and mid-cap stocks is an advantage. He typically seeks to invest in quality companies with differentiated businesses.

Although the investment team is quite experienced, they have recently undergone a restructuring process, with managers being assigned roles that reflect their areas of strength. While Rahul Baijal manages the AMC’s large-cap strategies, Shiv Chanani now manages flexi-cap strategies and Krishnakumar manages their small- and mid-cap mandates in addition to his role as the CIO of equities. We think that the restructuring will yield positive results over the long term. However, we would like to evaluate the impact of these changes over a longer term before we build more conviction on the team.

Although the fund’s allocations towards large caps have gone up slightly over the past year, it continues to remain true to its mandate and has a higher exposure to small- and mid-cap stocks than its category peers. The fund’s long-term orientation could lead to a divergent performance profile compared with the competition and index over shorter periods. However, the investment process should hold the fund in good stead over the long term. Despite having a positive view on the fund, we would like to adapt a wait-and-watch approach to see how the changes pan out over the long term. Based on these factors, we assign a Morningstar Analyst Rating of Bronze on this fund.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

A portfolio that is built based on high-conviction ideas and can tend to be sector-heavy.

People

A capable leader at the helm, yet the recent internal restructuring restricts our conviction level.

Parent

The AMC has been working towards making positive changes.

Process

A well-defined process, aimed at constructing a growth-oriented long-term portfolio of stocks.

Performance

The fund posted a positive return under Krishnakumar’s lead.

Price

The fund’s price is higher than the median offering for the category.

Important Disclosures

Unless stated otherwise, this report was prepared by the person(s) noted in their capacity as Manager Research Analysts (i.e., fund analysts) employed by Morningstar, Inc., or one of its affiliates. It has not been made available to the issuer prior to publication.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Manager Research Analysts’ expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund’s or the fund’s underlying securities’ creditworthiness.

No material interests are held by Morningstar or the Manager Research Analyst in the financial products that are the subject of the research reports or the product issuer. Regarding Morningstar’s conflicts of interest: 1) Manager Research Analysts’ compensation is derived from Morningstar’s overall earnings and consists of salary, bonus and in some cases restricted stock; however, Manager Research Analysts are neither allowed to participate directly or try to influence Morningstar’s investment management group’s business arrangements nor allow employees from the investment management group to participate or influence the analysis or opinion prepared by them. Further information on Morningstar’s Code of Ethics policies is available from http://corporate.morningstar.com/us/asp/subject.aspx?xmlfile=540.xml

Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission.

For Recipients in India: Research on securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (“Investment Research”) is prepared by Morningstar Investment Adviser India Private Limited, which is registered with the Securities and Exchange Board of India. Your access to the Investment Research does not establish an advisory relationship with Morningstar Investment Adviser India. You should seek the advice of a financial professional before making an investment decision to ensure, among other things, that the security is suitable based on your particular needs and circumstances.

For Registered users only indicates the feature is available for Registered users only.
Top
Mutual Fund Tools
Feedback