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2012
Canara Robeco Emerging Equities Fund Tags: is Canara Robeco Emerging Equities Fund, should i invest in Canara Robeco Emerging Equities Fund Date: Meta Description: Canara Robeco Emerging Equities is an average small & mid cap fund Category: Mutual Funds
Analysis: Our recommendation for fresh investment: No Our recommendation for existing investment: Hold
Canara Robeco Emerging Equities Fund is being managed by Soumendra Nath Lahiri. It was a good performer in the past but it has given a lackluster performance in the last one year. If you have invested in this fund, keep a close watch on where performance is headed. This fund does not deserve more than 30% of your total investment corpus. If you are a new investor you can skip this one for a better performing mid cap fund.
Where does this fund invest your money? Canara Robeco Emerging Equities Fund is a small and mid cap fund which invests your money predominantly in stocks of mid cap and small cap companies of high growth or having prospects of high growth in the future. Small and mid size companies have the potential to become large companies and when that happens you are expected to get bumper returns. The fund allocates about 56% to medium cap companies and 44% to small cap companies.
How has it performed in the past? If you had invested Rs 1 lakh when the fund was launched in Nov 2005 the value of your investments would be around Rs 2 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.3 lakhs. The performance has been not better than or similar to other mutual funds in this category. The fund has been giving at around 5% every year for those who stayed invested for last 5 years.
Assume you had invested Rs 10,000 every month in Canara Robeco Emerging Equities Fund through SIP for the past 5 years today you would have just around Rs 7.7 lakhs.
How will it perform in the future? Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to de well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 9% then you can expect top performing mutual funds to give you returns in excess of 15%. We advise you to avoid too much of star gazing and future prediction. Mutual fund schemes that have exposure to mid size companies tend to show results when their bet on few companies comes true. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for a mid cap fund should be to earn higher return than on a diversified large cap fund.
When to review the performance? Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.
When to exit? Withdraw when your goals are closer to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.
What are the tax implications? The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. Canara Robeco Emerging Equities Fund does not qualify for sec 80C ELSS benefits.
Better alternatives for satellite portfolio IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus Fund- Plan B
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