GEMGAZE

April 2016

Global and International funds have exhibited subdued performance in the past year. Within the international category, investors have a few choices and they need to look at the country and theme to assess if a particular fund is suitable.

GEMGAZE enables you to do exactly this. The five sparkling GEMs among the global equity funds in India in 2015 have retained their preeminent status in 2016 also.

Principal Global Opportunities Fund Gem

Principal Global Opportunities Fund is an open-ended balanced fund of fund launched by Principal Financial Group (Mauritius) Limited. The fund is managed by Principal PNB Asset Management Company Private Limited. It invests in funds which invest in the public equity and fixed income markets across the globe. Launched in March 2004, Principal Global Opportunities Fund is the oldest global fund in India. With an AUM of Rs 16 crores, Principal Global Opportunities Fund has earned a one-year, three-year, and five-year returns of -13.37%, -0.86%, and 1.33% respectively. Being a feeder fund, the performance of the fund depends entirely on Principal Global Investors – Emerging Market Equity. 98.64% of the portfolio is in equity, predominantly mid and small cap stocks. The fund is benchmarked against the MSCI World Index. The expense ratio is 0.79% and the portfolio turnover ratio is 10%. The fund has been managed by Mr. Rajat Jain since inception.

Templeton India Equity Income Fund Gem

Templeton India Equity Income Fund is a multi-cap fund which invests your money in companies that have a currently or potentially attractive dividend yield across market caps both in India and overseas. Although it can invest up to 50% of its assets in foreign equity it has never exceeded the 35% limit so far. The portfolio has 48% exposure to large cap companies, 41% exposure to mid-cap companies and 11% exposure to small cap companies. Large cap companies are stable in returns compared with mid cap and small cap companies. However it is the small and mid cap companies that have huge prospects of bumper returns. With an AUM of Rs 829 crores, the one-year return of the Templeton India Equity Income Fund is -8.24% as against the category average of -9.84%. The fund is managed by renowned fund manager Dr. J Mark Mobius and assisted by Chetan Sehgal and Vikas Chiranewal. The fund’s philosophy is investing in growth stocks trading at a significant discount to their earnings potential. The team prefers issues that are cheaper than their peers, the broader market, and historical valuations. Therefore, in-depth research is core to the process. While evaluating companies, both qualitative and quantitative factors are considered. For this fund, foreign equities comprise roughly 30% of the portfolio. The team follows a similar approach for picking foreign stocks but typically scouts for companies in sectors that may not be well established in India. Stocks are identified by assessing price in relation to the intrinsic value through an analysis of cash flows, earnings, and asset value. Three features make the fund stand out from peers: value, bargain hunting, and long-term orientation. The fund is benchmarked against the S & P BSE 200. The expense ratio of the fund is 2.56% and the portfolio turnover ratio is 1%.

DHFL Pramerica Top Euroland Offshore Fund Gem

Deutsche Mutual Fund had changed the name of DWS Invest Global Thematic Offshore Fund, launched in September 2007, to DWS Top Euroland Offshore Fund w.e.f. January 9, 2014. The underlying fund was changed to DWS Invest Top Euroland, a Germany-based fund. The feeder fund was earlier investing in DWS Invest Global Thematic Fund based in the US. The fund's benchmark was changed from MSCI World Index to EURO STOXX 50. DHFL Pramerica Mutual Fund has agreed to take over Deutsche Mutual Fund’s (DWS) schemes and the corresponding change in the sponsorship, trusteeship, management, and administration of the same. Accordingly, the DWS has announced change in 10 of its funds with effect from March 4, 2016. The name of DWS Top Euroland Offshore Fund has been changed to DHFL Top Euroland Offshore Fund. DHFL Pramerica Mutual Fund has changed the benchmark of DHFL Pramerica Top Euroland Fund from EURO STOXX 50 to MSCI EMU Index with effect from March 8, 2016. The India-based fund allocates 95-100% of its assets to units of the overseas fund. Its allocation to debt instruments in the domestic money market stays between 0 and 5%. With an AUM of a mere Rs 20 crores, DHFL Pramerica Top Euroland Offshore Fund has earned one-year, three-year, and five-year returns of -9.29%, 3.86%, and 5.56% respectively. There has been a reversal of fortunes in the three-month period with the return at -4.19%. The expense ratio of the fund is 2.04% and the portfolio turnover ratio is 5%. The fund managers are Kumaresh Ramakrishnan since July 2007 and Akash Singhania since December 2012.

Sundaram Global Advantage Fund Gem

Sundaram Global Advantage Fund was launched in August 2007. The fund has an AUM of Rs 21 crores. Sundaram Global Advantage Fund has earned a one-year, three-year, and five-year returns of -14.43%, -2.43%, and 0.66% respectively.  The fund has invested in 10 foreign equity mutual funds, with Fidelity South East Asia and DB Tracker Emerging Markets Asia being the top two funds. 97.69% of the fund’s assets are in equities with the rest in cash. The fund is benchmarked against the MSCI Emerging Markets Index. The fund managers are Mr. Avinash Agarwal since January 2016. The expense ratio of the fund is 1.63%.

ICICI Prudential Indo Asia Equity Fund Gem

ICICI Prudential Indo Asia Equity Fund was launched in September 2007. The fund has an AUM of Rs 132 crores. Its one-year return is -12.04% as against the category average return of -9.84%. ICICI Prudential Indo Asia Equity Fund, an open-ended diversified equity fund offers a balanced portfolio of investment opportunities in India as well as Asia ex-Japan, where the offshore allocation is aimed at improving the return and risk characteristics of the portfolio over a longer term. This fund invests 65-100% in Indian equity and 0-35% in IOF Asian Equity Fund; a diversified fund managed by Prudential Asset Management, Singapore. The Indian component is managed as a flexi-cap fund and seeks to benefit from diversification across developed and emerging economies across Asia (ex-Japan). The fund has access to global leaders not otherwise available e.g. Industrial and Commercial Bank of China (China), Samsung Electronics (Korea), Taiwan Semi-Conductor (Taiwan), and access to industries not otherwise available e.g. Taiwan's semi-conductor industry, Hong Kong's property sector, China's insurance, and aerospace industries, Korea's ship building industry. The Fund is benchmarked against CNX Nifty (65) and MSCI AC Far East Free Ex-Japan (35). 97.27% of the assets of the portfolio are in equity. The expense ratio of the fund is 2.6% and the portfolio turnover ratio is 95%. The top three sectors are finance, energy, and services, constituting 57.87% of the assets. The fund managers are Shalya Shah since October 2014 and Atul Patel and Sankaran Naren since February 2015.