Invesco India Growth Opportunities Fund: Rising in Volatile Times
Sep 19, 2019

Author: Divya Grover

(Image source: photo created by jannoon028 - freepik.com)

In times of turbulent equity markets, it can prove rewarding if your portfolio is well placed to tide over volatility. Even during such times returns can be optimised by careful stock picking.

Invesco India Growth Opportunities Fund is one such fund that aims to perform well across market phases by selecting stocks without any style or sector bias.

The fund was earlier know as Invesco India Growth Fund and was categorised as a multi-cap fund. It has now been categorised as Large & Midcap Fund.

Launched in August 2007, the fund has a total asset under management of Rs 1,658 crore as on August 31, 2019. The scheme is managed by Mr Taher Badshah and Mr Amit Ganatra.

Investment objective: Invesco India Growth Opportunities Fund aims to generate capital appreciation from a diversified portfolio of predominantly Equity and Equity Related Instruments of Large and Midcap companies.

Graph 1:  Growth of Rs 10,000, If Invested In IIGOF 5 Years Ago

Had you invested Rs 10,000 in IIGOF five years back on September 18, 2019, it would have grown to Rs 17,201 as on September 18, 2019. This translates into compounded annualised growth rate of 11.46%. In comparison, a simultaneous investment of Rs 10,000 in its benchmark S&P BSE Large Midcap 65:35 - TRI would now be worth Rs 14,913 (a CAGR of 8.32%). As can be seen in the chart alongside, the fund has generated substantial lead over the benchmark in the last five years.

Graph 2:  IIGOF Year-on-Year Performance

Launched in August 2007, IIGOF has a track record of over 12 years. The year-on-year performance comparison of the fund vis-a-vis its benchmark S&P BSE 250 LargeMidcap 65:35 - TRI shows that the fund outperformed the benchmark in 6 out of the last 10 calendar years. Majority of alpha was generated in CY 2013. The fund managed to cushion the downside in CY 2011 and CY 2018 and has done well to contain the downside in the current year as well.

Table 1: IIGOF Performance vis-à-vis category peers

Scheme name Corpus (Cr.) 1 year (%) 2 year (%) 3 year (%) 5 year (%) Std Dev Sharpe
Mirae Asset Emerging Bluechip 7,759 2.53 11.48 18.07 25.36 15.04 0.10
LIC MF Large & Midcap Fund 509 -1.63 9.01 15.46 NA 14.19 0.07
Canara Rob Emerg Equities Fund 4,668 -3.43 9.54 15.26 24.12 16.14 0.04
Invesco India Growth Opp Fund 1,658 1.71 13.09 14.94 16.89 13.10 0.09
Sundaram Large and Mid Cap Fund 721 1.98 11.71 14.79 16.94 13.49 0.07
Principal Emerging Bluechip Fund 2,057 -6.80 7.62 14.61 21.17 15.66 0.00
Essel Large & Midcap Fund 100 -0.30 7.60 14.19 NA 14.61 0.03
IDFC Core Equity Fund 2,678 -2.94 7.89 13.59 13.86 13.70 0.00
Kotak Equity Opp Fund 2,488 0.17 8.03 13.41 16.47 13.09 0.03
DSP Equity Opportunities Fund 5,166 -2.67 7.25 13.24 16.19 14.03 0.01
Edelweiss Large & Mid Cap Fund 429 -0.11 10.42 11.74 14.34 13.10 0.02
ICICI Pru Large & Mid Cap Fund 3,457 -1.28 6.20 11.66 12.30 12.38 -0.03
SBI Large & Midcap Fund 2,493 0.22 8.95 11.51 15.90 13.73 -0.01
Tata Large & Mid Cap Fund 1,378 2.06 8.16 11.04 14.99 12.71 0.01
Aditya Birla SL Equity Advantage Fund 4,708 -7.96 3.90 10.72 16.44 15.81 -0.05
L&T Large and Midcap Fund 1,274 -7.74 5.54 10.54 13.89 14.57 -0.01
Quant Large & Mid Cap Fund 4 -5.12 3.29 10.51 19.23 12.88 -0.06
HDFC Growth Opp Fund 1,231 -0.81 6.18 9.14 8.43 13.53 -0.03
UTI Core Equity Fund 833 -4.84 5.32 8.75 11.58 13.68 -0.07
Franklin India Equity Advantage Fund 2,467 -2.72 6.11 8.74 14.05 12.75 -0.06
BOI AXA Large & Mid Cap Equity Fund 153 -11.67 4.14 8.06 10.36 16.45 -0.04
Reliance Vision Fund 2,606 -8.78 2.27 7.17 12.10 16.35 -0.08
S&P BSE 250 LargeMidCap 65:35 - TRI -1.35 9.30 12.65 14.33 13.80 0.01
Returns are on a rolling basis and in %, calculated using Direct Plan - Growth option. Those depicted over 1-Yr are compounded annualised.
Data as on September 18, 2019
(Source: ACE MF)

*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. Past performance is not an indicator for future returns. The percentage returns shown are only for indicative purposes.


In terms of performance, IIGOF outperformed the benchmark and average category peers across rolling periods. The fund's performance in the 1-year rolling period is noteworthy as most of its peers struggled to generate positive returns.

IIGOF found place among the top 5 performers on a 3-year rolling return basis. Mirae Asset Emerging Bluechip, LIC MF Large & Midcap Fund and Canara Rob Emerg Equities Fund were the other top performers in the category.

In terms of risk-return parameters, IIGOF undertook lower risk as compared to benchmark and many of its peers and it managed to reward investors with superior risk-adjusted returns.

Investment strategy of IIGOF

Classified under Large and Midcap Funds, IIGOF is mandated to invest predominantly in equity and equity related instruments of large and mid cap companies, with minimum 35% allocation to each. The fund aims to generate consistent outcomes in all market conditions and to achieve that, it invests in a combination of growth and value stocks without any specific sector bias. While picking stocks, the fund adopts top-down approach to identify attractive looking sectors and bottom-up approach to select high growth stocks within those sectors.

Graph 3: IIGOF Portfolio Allocation And Market Capitalisation Trend

IIGOF is mandated to invest at least 35% of its assets each in equity and equity related instruments of large cap companies and simultaneously maintain minimum 35% allocation in mid caps as well. Accordingly, the fund maintains a large cap bias and invests 58-60% of its assets in equities of large cap companies. It maintains around 35% of its assets in mid cap stocks. The fund has a marginal allocation of up to 2% in small caps. The balance of its holdings is maintained in the form of cash.

Graph 4:  IIGOF Top Portfolio Holdings

Kotak Standard Multi-cap Fund Top Portfolio Holdings Kotak Standard Multi-cap Fund Top Portfolio Holdings
Holding (in %) as on August 31, 2019
(Source: ACE MF)


IIGOF held 47 stocks in its portfolio as on August 31, 2019, diversified across various sectors. The top 10 stocks constitute 39.5% of the total holdings. HDFC Bank has the highest allocation of 7.8% in the portfolio, followed by Reliance Industries (5.5%) and ICICI Bank (5%). Rest of the stocks in the top 10 holdings have allocation of around 2.5-4% each.

In terms of sector wise holdings, the fund has the maximum exposure to Banks at 19.9%. Consumer Non Durables and Finance follow with allocation of 11.5% and 9.5%, respectively. Infotech (9.2%) and Engineering (6.7%) too find place among the top preferred sectors. Pharmaceuticals, Petroleum Products, Auto Ancillaries, Oil & Gas and Cement are the other prominent sectors in the fund's portfolio.

Top Contributors

Among the stocks in the fund's portfolio, ICICI Bank contributed the most to its gains in the last one year with a weighted return of 0.9%. Bajaj Finance, Apollo Hospitals Enterprise and HDFC Bank were the other top contributors to the returns.

The stocks that eroded its gains the most were RBL Bank, Maruti Suzuki India, Mahindra & Mahindra and National Aluminium Company, Exide Industries, Motherson Sumi Systems and Sun Pharma.

Suitability of IIGOF

IIGOF invests around 95% of its portfolio in equities with majority of it invested in equities of large cap companies. It also allocates a significant portion of its portfolio in equities of mid cap companies. Large caps can enable appreciation of capital with an element of stability, while mid caps can boost the portfolio returns but with a higher degree of risk.

Thus it is suitable for investors with moderately high risk appetite and an investment horizon of at least 5 years.

IIGOF has performed well across periods and outpaced many of its peers and the benchmark. It has managed to contain the downside even as the equity markets remained volatile and has the potential to continue with its superior long term performance.

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.

Editor's note: The last few years have not been among the best for equity mutual funds. While most funds have underperformed or are struggling to match the returns of the benchmark, there are few funds that have the potential to constantly generate alpha for its investors. And we have recently identified five such high alpha generating funds, in our latest report 'The Alpha Funds Report 2019'. Do not miss our latest research finding. Get your access to this exclusive report, right here!

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

There are no outstanding litigations against the Company, its subsidiaries and its Directors.

Terms and condition on which its offer research report

For the terms and condition for research report click here.

Details of associates

  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. Rahul Goel;

  12. I V Subramaniam.

Disclosure with regard to ownership and material conflicts of interest
  1. Neither QIS, it's Associates, Research Analyst or his/her relative have any financial interest in the subject Company;

  2. 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;

  3. Neither QIS, it's Associates, Research Analyst or his/her relative has any other material conflict of interest at the time of publication of the research report except that QIS (PersonalFN) is, as per SEBI (Mutual Funds) Regulations 1996, an associate / group Company of Quantum Asset Management Company Private Limited and Trustees and Sponsor of Quantum Mutual Fund (QMF) and to that extent there may be conflict of interest while recommending any schemes of QMF. However, any such recommendation or reference made is based on the standard evaluation and selection process, which applies uniformly for all Mutual Fund Schemes. The payment of commission (upfront / annualized & trail), if any, for any Schemes by QMF to QIS (PersonalFN) is also at arm's length and as per prevailing market practices.

Disclosure with regard to receipt of Compensation
 
  1. Neither QIS nor it's Associates have received any compensation from the subject Company in the past twelve months;

  2. Neither QIS nor it's Associates have managed or co-managed public offering of securities for the subject Company;

  3. Neither QIS nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject Company;

  4. Neither QIS nor it's Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months.

  5. Neither QIS nor it's Associates have received any compensation or other benefits from the subject Company or third party in connection with the research report

General disclosure
  1. The Research Analyst has not served as an officer, director or employee of the subject Company.

  2. QIS or the Research Analyst has not been engaged in market making activity for the subject Company.

Subject Company means Mutual Fund Schemes

Quantum Information Services Private Limited CIN: U65990MH1989PTC054667 Regd. Office: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021 Corp. Office: 16 Jolly Maker Chambers II, 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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