Five equity funds have given superior 10-year SIP returns

Many investors who have put money into equities through Systematic Investment Plans (SIP) in the past five years and even beyond have reason to be disappointed. While 10-year SIP returns of various equity schemes have been in single digits, there are some that managed to outperform peers and the benchmark indices. ET takes a look at five funds across categories in which SIP returns have been 13-16 per cent over a 10-year period. SBI Small Cap FundAUM: Rs 3,280 croreFund Manager: R Srinivasan10-year SIP Return: 16.4 per centTop 3 holdings: Hawkins Cookers, Dixon Technologies, Elgi EquipmentsOpen for lumpsum investment only since March end, this fund is one of the most sought after in the small-cap space. It follows a bottom-up strategy for stock picking with a strong emphasis on management quality, return on equity and valuations. The portfolio has 45-50 stocks with the top 10 bets accounting for 37 per cent of the portfolio. It has consistently outperformed its benchmark by a decent margin over 1, 3, 5 and 10-year periods.Canara Robeco Emerging Equities FundAUM: Rs 4,846 croreFund Manager: Miyush Gandhi, Shirdatta Bhandwaldar10-year SIP Return: 14.82 per centTop 3 holdings: HDFC Bank, Reliance Industries, ICICI BankA fund in the large and midcap category, the proportion of the large-cap and mid-cap stocks in the portfolio is 55:45. Knowing for managing its risk well that has helped generate superior returns, the scheme avoids concentrated bets and caps exposure to mid- and small-cap stocks at 3-4 per cent in the portfolio. Some of the companies preferred by the fund are those who gain market share, good ROCE and backed by strong management.Edelweiss Greater China Equity Offshore FundAUM: Rs 193 croreFund Manager: Bhavesh Jain, Hardik Verma10-year SIP Return: 14.24 per centTop 3 holdings: Tencent, Alibaba, TSMCA fund of funds, this scheme invests in JPMorgan Funds - Greater China Fund. It is meant for investors with a high risk appetite looking to diversify geographically to China, Hong Kong and Taiwan. Amongst sectors, the fund is overweight on IT, healthcare and consumption. The fund manager builds a high conviction portfolio investingin 50 out of 785 stocks on MSCI golden dragon index. With China taking strong containment measures for Covid-19 as well as proactive countercyclical economic policies, fund managers are confident of a strong bounce back.Nippon India Pharma FundAUM: Rs 2,851 croreFund Manager: Sailesh Raj Bhan10-year SIP Return: 13.66 per centTop 3 holdings: Aurobindo Pharma, Dr Reddy’s, Sun PharmaThe manager of one of the best-performing sectoral funds believes that earnings, which were the biggest challenge for the last three years, are starting to improve across segments due to low base, efficiency, and currency benefits. Excessive pricing pressure is bottoming out, rise in FDA plant resolutions and product approvals are likely to lead a recovery in US business. Companies with an India focus are expected to grow at a faster rate and huge underpenetration, rising income make this sector a structural investment opportunity. Being a sector fund it is recommended for risk takers with exposure not exceeding 10 per cent of equity portfolio.AXIS Long Term Equity FundAUM: Rs 19,632 croreFund Manager: Jinesh Gopani10-year SIP Return: 13.37 per centTop 3 holdings: TCS, Avenue Supermarts, Kotak Mahindra BankThe scheme with a largest AUM portfolio eligible for tax saving under Section 80C has a lock-in period of three years. This helps the fund manager take a longer term view and eliminates near-term pressures on stock selection. Amongst the top performers in the category, the fund manager runs a concentrated portfolio of 35-40 stockswith the top 10 stocks accounting for 64 per cent of the portfolio. Around 75 per cent of the portfolio is made up of large-caps and the rest in mid- and smallcaps. The fund manager is overweight on financials and auto, and underweight pharma and FMCG.

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