A focused and concentrated portfolio of large-sized companies works in any phase of the market. This is because of the very nature and quality of businesses of large-sized companies, which give the investor the advantage of long-established brands, relatively better balance sheets, high adherence to corporate governance, dominant market and most importantly, a history of superior earnings growth. Considering these factors, it makes immense sense to have such schemes in one’s portfolio. One scheme that provides these advantages is DSP BlackRock Focus 25.
Managed by Harish Zaveri and Jay Kothari, the scheme invests close to 80% of the portfolio money in large-sized companies that have all the aforementioned factors in their favour. This shows the fund managers believe in high conviction bets of large ideas, and these have paid off.In the past three-year and five-year period, the scheme has delivered returns of 20.4% and 14.7% respectively, while its benchmark S&P BSE 200 has given returns of 14.1% and 12.1% respectively during the same periods.
In the past six months, the scheme’s fund managers have invested in stocks which fell due to industry-related problems and issues rather than their own fundamentals. They increased their exposure to Bajaj Auto, Tata Motors, Lupin, Bajaj Finance, Sun Pharmaceuticals and Infosys. As fundamentals of business of these companies remain strong, these companies would continue to show encouraging growth in their revenues and earnings.
Retail investors with at least a three-year investment horizon should consider investing in the scheme as it provides relatively safe bets in large-sized companies.