Canara Robeco Equity Hybrid Fund (erstwhile Canara Robeco Equity Debt Allocation Fund) was launched in February 1993. It was renamed after SEBI reclassified mutual funds in March 2018. It featured in the top 30 percentile of the aggressive hybrid category of CRISIL Mutual Fund Ranking (CMFR) during the three quarters ended June 2019. Shridatta Bhandwaldar and Krishna Sanghavi have been managing the fund’s equity portfolio since July 2016 and October 2018, respectively. Avnish Jain has been managing the debt portfolio since October 2013. The month-end assets under management (AUM) increased over three times from Rs 723 crore in September 2016 to Rs 2,341 crore in August 2019.
The fund’s investment objective is to generate long-term capital appreciation, income from a portfolio constituted of equity and equity-related securities as well as fixed income securities (debt and money market securities).
The fund outperformed its benchmark (CRISIL Hybrid 35+65 - Aggressive Index) during the past 1, 5, 7 and 10 year trailing periods. It consistently outperformed its peers (funds ranked under the aggressive hybrid category in June 2019 CMFR) across all trailing periods under analysis. An investment of Rs 10,000 on April 1, 2002 (inception of the benchmark), would have grown to Rs 1,62,808 (17.29 per cent annualized growth or CAGR) as on September 26, 2019. A similar investment in the category and the benchmark would have grown to Rs 1,26,611 (15.61 per cent CAGR) and Rs 94,340 (13.68 per cent), respectively.
Systematic investment plan (SIP) is a disciplined mode of regular investments offered by mutual funds to investors. An investment of Rs 10,000 per month in the fund in the past 10 years via SIP, totaling Rs 12 lakh, would have grown to Rs 22.65 lakh by September 26, 2019, at 12.23 per cent annualised returns. In comparison, the same investment in the benchmark would have grown to Rs 20.8 lakh at 10.63 per cent annualised returns.
The fund had 68.41 per cent allocation, on average, to equity and the remaining to debt and money market instruments during the past three years. The equity portfolio has been predominantly composed of large cap stocks during this period with average 49.43 per cent exposure. Allocations to mid-cap and small cap stocks averaged 10.06 per cent and 8.92 per cent respectively during the same period.
Allocations to mid-cap and small cap stocks have been managed actively during this period, while maintaining predominant exposure to large cap stocks.
HDFC Bank, Reliance Industries, ICICI Bank, Kotak Mahindra Bank, and Infosys were the key contributors to the fund’s performance during the past three years and were also consistently held in this period.
The fund’s debt portfolio has been largely composed of the highest rated debt securities (AAA & A1+) and sovereign securities. It had 16.06 per cent allocation, on average, to AAA and A1+ rated securities and 7.78 per cent to sovereign securities in the past three years. Allocation to AA and A1 rated securities averaged 0.55 per cent while exposure to A and below rated securities averaged 0.03 per cent in this period.