Canara Robeco Bluechip Equity Fund: Displaying Stable Long-term Performance

May 09, 2024 / Reading Time: Approx. 10 mins

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Canara Robeco Bluechip Equity Fund: Displaying Stable Long-term Performance

Welcome to  PersonalFN's weekly analysis on diversified equity mutual funds! In this issue, we have analysed Canara Robeco Bluechip Equity Fund, highlighting its performance, peer comparison, investment strategy, fundamentals, portfolio, and suitability.

Canara Robeco Bluechip Equity Fund is a prudently managed Large Cap Mutual Fund that has a past track record of performing consistently well across various market phases, but has disappointed investors in the current bull phase. The fund still holds an encouraging long-term performance record.

What is the growth of Rs 10,000 invested in Canara Robeco Bluechip Equity Fund five years ago?

Past performance is not an indicator of future returns
Data as of May 08, 2024
(Source: ACE MF, data collated by PersonalFN)
 

Launched in August 2010, Canara Robeco Bluechip Equity Fund has a past record of performing consistently well across various market phases. The fund registered strong performance on multiple occasions in the past, especially between 2018 and 2020, which helped it make it to the list of category outperformers. Its superior long-term track record also helped it to get the attention of investors; its corpus has nearly doubled in the last two years.

Canara Robeco Bluechip Equity Fund has flourished under the supervision of its experienced fund manager, Mr Shridatta Bhandwaldar (Head - Equities). The fund managers' strategy of sticking to index heavyweights that have been driving the index over the last few years has turned in its favour and paid off the investors with superior returns.

During the 2020 market crash, the fund managed to limit the downside, generating an alpha of over 7.5 percentage points when compared to the index. Notably, Canara Robeco Bluechip Equity Fund has underperformed in the current bull phase which started in the latter half of 2020. This has impacted its returns in the short to medium term. However, over the long-term time frames, the fund still figures among the top performers in the category.

Over the last 5-years, Canara Robeco Bluechip Equity Fund has registered a compounded annualised growth of around 19.3%, as against the 16.9% CAGR delivered by its benchmark S&P BSE 100 - TRI index. Clearly, Canara Robeco Bluechip Equity Fund's remarkable long-term performance, supported by its ability to limit the downside, helped it find a space in the list of prime contenders in the Large Cap Fund category.

How has Canara Robeco Bluechip Equity Fund performed on a rolling return basis?

Scheme Name Corpus (Cr.) 1 Year 2 Year 3 Year 5 Year 7 Year Std Dev Sharpe
Nippon India Large Cap Fund 26,138 30.48 20.09 27.86 16.60 16.37 14.01 0.41
HDFC Top 100 Fund 32,355 26.49 17.16 24.45 15.08 14.60 13.52 0.35
ICICI Pru Bluechip Fund 53,505 25.49 15.59 23.17 16.10 15.53 12.60 0.36
Aditya Birla SL Frontline Equity Fund 26,878 21.35 12.12 20.79 14.21 13.40 13.21 0.28
SBI BlueChip Fund 45,411 20.66 12.49 20.73 15.19 13.86 12.83 0.25
Kotak Bluechip Fund 7,901 21.04 11.86 20.50 15.98 14.68 13.29 0.27
Canara Rob Bluechip Equity Fund 12,830 21.04 11.25 19.27 17.06 16.33 12.81 0.26
UTI Large Cap Fund 12,483 17.96 9.13 18.76 14.35 13.85 13.43 0.22
Mirae Asset Large Cap Fund 37,885 17.35 9.82 18.69 14.44 14.92 12.92 0.23
Axis Bluechip Fund 33,523 15.67 5.66 14.32 13.62 15.01 13.97 0.17
S&P BSE 100 - TRI 20.30 12.10 20.44 14.75 14.67 13.83 0.26
The securities quoted are for illustration only and are not recommendatory.
Returns are on a rolling basis and in %. Direct Plan-Growth option. Those depicted over 1-Yr are compounded annualised. Risk ratios are calculated over a 3-year period assuming a risk-free rate of 6% p.a.
Data as of May 08, 2024
(Source: ACE MF, data collated by PersonalFN)
Please note, this table only represents the best-performing funds based solely on past returns and is NOT a recommendation. Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance is not an indicator for future returns. The percentage returns shown are only for indicative purposes.
 

Even though Canara Robeco Bluechip Equity Fund may underperform the benchmark and some of its peers in the short run, its long-term performance is encouraging. In the last 1-year and 3-year period, Canara Robeco Bluechip Equity Fund has trailed many of its prominent peers by a notable margin. This has impacted its returns in the short to medium term. Nonetheless, over the longer time frame of 5 years and 7 years, the fund has outpaced the benchmark as well as the category average by around 1.5-2.5 percentage points on a rolling returns basis.

The volatility registered by the fund is far more reasonable when compared to the benchmark and the category average. The fund's Standard Deviation (12.81%, annualised) is much lower than its benchmark as well as the category average, whereas its Sharpe (0.26) is nearly in line with the benchmark and the category average.

[Read: Do Large Cap Funds Make More Sense in An Overheated Equity Market?]

What is the investment strategy of Canara Robeco Bluechip Equity Fund?

Categorised under Large-cap funds, Canara Robeco Bluechip Equity Fund is mandated to invest a minimum of 80% of its assets in large-cap stocks. Accordingly, it focuses on bluechip companies and invests in stocks of companies figuring in the list of top 100 companies based on market capitalisation.

While selecting stocks for the portfolio, the fund focuses on companies and sectors that are expected to perform better than the general market and uses inputs from the internal quant model to identify investable companies. Canara Robeco Bluechip Equity Fund follows a blend style of investing i.e. it looks for high-growth stocks available at fair valuation and stays invested for a long term. The fund manager gives higher weightage to companies with competent management, robust business fundamentals, and reasonable valuations.

The fund manager aims to invest in large-sized companies with an established business presence, good reputation, and solid brand equity. Canara Robeco Bluechip Equity Fund usually holds about 45-55 stocks in its portfolio and follows a buy-and-hold investment strategy, which reflects the strong long-term conviction the fund management has when it picks stocks for the portfolio. The fund had a reasonable turnover ratio of around 20% in the last one year.

What are the top portfolio holdings in Canara Robeco Bluechip Equity Fund?

Graph 2 Graph 2
Holding in (%) as of April 30, 2024
(Source: ACE MF, data collated by PersonalFN)
 

Canara Robeco Bluechip Equity Fund usually holds a fairly diversified portfolio of about 45 to 55 stocks. As of April 30, 2024, the fund held 53 stocks in its portfolio spread across sectors. The top 10 stock holdings accounted for about 46.9% of the portfolio. Index heavyweights like HDFC Bank, ICICI Bank, Reliance Industries, L&T, and Bharti Airtel currently find a place in the top 5 portfolio holdings. Many of these stocks have been part of the fund's top holding for over two years now.

Canara Robeco Bluechip Equity Fund's prominent bet on names like ICICI Bank, L&T, Bharti Airtel, and SBI turned out to be rewarding for the fund in the last 2 years. Bajaj Auto, Axis Bank, NTPC, Tata Motors, Maruti Suzuki India, ABB India, Sun Pharma, ITC, Max Healthcare Institute, and Ultratech Cement were among the other stocks that contributed significantly to its gains.

Among sector holdings, Canara Robeco Bluechip Equity Fund's portfolio is majorly exposed to the Banking and Finance sector having a combined allocation of around 29.4%. Engineering, Infotech, Auto, Consumption, Petroleum, and Pharma are among the other prominent sectors in the portfolio with an exposure of about 5.5% to 10% in each. It also holds diversification to Telecom, Power, Cement, Retail, Auto Ancillaries, and Healthcare among others. The top 5 sectors in Canara Robeco Bluechip Equity Fund's portfolio together account for around 58% of its assets.

Is Canara Robeco Bluechip Equity Fund suitable for my investment goals and risk tolerance?

Canara Robeco Bluechip Equity Fund has shown the potential to generate reasonable gains during market uptrends and distinctly outperform the benchmark, as well as most of its large-sized peers during depressed market conditions. The fund appears to be well placed in terms of its process-driven portfolio management strategies and is well capable of rewarding investors willing to stay invested in the fund for stable returns in the long run.

Backed by a well-defined investment process, Canara Robeco Bluechip Equity Fund has the ability to timely pick quality names having high growth potential, and deliver market-beating returns in the long run. The fund has proven its worth for long-term investors and is capable of generating superior risk-adjusted returns.

Canara Robeco Bluechip Equity Fund is suitable for investors looking for a well-managed Large Cap Fund with high growth potential with a long-term view of at least 5 years.

Watch this video to find out the best Large Cap Mutual Funds for 2024:

 

Note: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Registration granted by SEBI, Membership of BASL and certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to investors.

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DIVYA GROVER is the co-editor for FundSelect, the flagship research service of PersonalFN. She is also the co-editor of DebtSelect. Divya is an avid reader which helps her in analysing industry trends and producing insightful articles for PersonalFN’s popular newsletter – Daily Wealth letter, read by over 1.5 lakh subscribers.
Divya joined PersonalFN in 2019 and has since then used stringent quantitative and qualitative parameters to analyse funds to provide honest and unbiased research to investors. She endeavours to enable investors to make an informed investment decision and thereby safeguard their wealth.


Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.

 

DISCLOSURE AS PER SECURITIES AND EXCHANGE BOARD OF INDIA (RESEARCH ANALYSTS) REGULATIONS, 2014

About the Company including business activity

Quantum Information Services Private Limited (QIS) was incorporated on December 19, 1989.

QIS was promoted by Mr Ajit Dayal with an objective of providing value-based information/views on news related to equity markets, the economy in general, sector analysis, budget review and various personal products and investments options available to the Public. It was the first company to start equity research on an institutional level.

'PersonalFN' is a service brand of QIS and was started in the year 1999. In 1999, the Company registered the Domain name www.personalfn.com for providing information on mutual funds and personal financial planning, financial markets in general, etc. and services related to financial planning and research in various financial instruments including mutual funds, insurance and fixed income products to customers. It offers asset allocation and researched investment recommendations through its financial planning services.

Quantum Information Services Private Limited (QIS) is registered as Investment Adviser under SEBI (Investment Adviser) Regulations, 2013 and having Registration No.: INA000000680. In terms of the second proviso to Regulation 3 (1) of SEBI (Research Analysts) Regulations, 2014 the Company is not required to obtain Certificate of registration from SEBI.

Disciplinary history

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Details of associates

  • Group Companies including:

    1. Money Simplified Services Private Limited;

    2. PersonalFN Insurance Services India Private Limited;

    3. Equitymaster Agora Research Private Limited;

    4. Common Sense Living Private Limited;

    5. Quantum Advisors Private Limited;

    6. Quantum Asset Management Company Private Limited;

    7. HelpYourNGO.com India Private Limited;

    8. HelpYourNGO Foundation;

    9. Natural Streets for Performing Arts Foundation;

    10. Primary Real Estate Advisors Private Limited;

    11. HYNGO India Private Limited;

  • Directors of the Company - Suresh Lulla; I V Subramaniam, Murali Ananthan Krishnan and Rafiq Dossani

Disclosure with regard to ownership and material conflicts of interest
  1. ‘subject company’ is a scheme on which a buy/sell/hold view or target price is given/changed in this Research Report;

  2. Neither QIS, it's Associates, Research Analyst or his/her relative have any financial interest in the subject Company;

  3. Neither QIS, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one per cent or more securities of the subject Company, at the end of the month immediately preceding the date of publication of the research report;

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Quantum Information Services Private Limited CIN: U65990MH1989PTC054667 Regd. & Corp. Office: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021

Email:info@personalfn.com Website: www.personalfn.com Tel.: 022 61361200 Fax.: 022 61361222 SEBI-registered Investment Adviser. Registration No. INA000000680, SEBI (Investment Advisers) Regulation, 2013

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