This two-year-old equity scheme follows the bottom up approach to stock picking, without any capitalisation bias. Its offer document specifies that it will invest across sectors in about 60 to 80 stocks.
The fund has dabbled in 130 stocks in its 25 month existence. But that doesn't seem much considering that the fund is highly diversified across 60 to 103 odd stocks. So far the fund has been essentially a large-cap player with more than 62 per cent of its assets deployed in large cap companies.
The fund posted superior returns vis-à-vis its peer group; it ranked 36 against the 145 funds that functioned in 2006, posting a 44.14 per cent return against the category average of 34.69 per cent for 2006. The good thing about the fund is that, while it manages to rise more than its peers in a rising market, it doesn't fall like a pack of cards when the market tide turns around. In the last market correction between February 2007 and March 2007 the fund lost much less than the category. In February while the category of equity diversified funds lost (-) 8.84 per cent, Fidelity Equity managed to do better by keeping losses limited to (-) 7.29 per cent. By March, the category had recovered a bit and lost (-) 0.86 per cent, Fidelity Equity had by now recovered and posed a modest gain of 0.75 per cent.
A comparison against the specified benchmark index- BSE 200 further reveals the stability that the fund has offered so far. Between January 2, 2006 and March 30, 2007, BSE 200 returned 24.45 per cent while Fidelity Equity managed to better that by returning 31.74 per cent.
This article was originally published on August 03, 2007.
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