L & T Mutual Fund

L&T Mutual Fund is a part of L&T Finance Holdings Limited which is in turn owned by L&T Limited. The AMC was founded in 2010 and has an AUM (Assets Under Management) of over Rs. 73,000 crore, ending September 2018.

Equity Funds

An equity mutual fund is a fund which predominantly invests its assets in shares/stocks. According to the Income Tax Act, an equity fund is a fund that invests at least 65% of its assets in equities. It can invest the balance 0-35% in debt or money market securities. 

Trailing Returns of All Equity L&T Mutual Fund Schemes

Mutual Fund Scheme	1 Year Return	3 Year Return	5 Year Return
L&T Business Cycle Fund(G)	-17.21%	5.32%	–
L&T Emerging Businesses Fund(G)	-10.39%	17.42%	–
L&T Equity Fund(G)	-3.57%	8.54%	14.66%
L&T India Large Cap Fund(G)	-3.51%	6.79%	12.35%
L&T India Value Fund(G)	-9.42%	10.66%	21.99%
L&T Infrastructure Fund(G)	-14.72%	13.57%	22.18%
L&T Large and Midcap Fund(G)	-10.08%	8.47%	15.36%
L&T Midcap Fund(G)	-12.14%	13.05%	25.46%
L&T Tax Advantage Fund(G)	-5.64%	11.88%	16.30%

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

Rolling Returns of All Equity L&T Mutual Fund Schemes

Mutual Fund Scheme	1 Year Rolling	3 Year Rolling	5 Year Rolling
L&T Business Cycle Fund(G)	-19.43%	6.89%	–
L&T Emerging Businesses Fund(G)	-11.35%	18.85%	–
L&T Equity Fund(G)	-5.18%	9.50%	15.87%
L&T India Large Cap Fund(G)	-4.04%	8.10%	13.81%
L&T India Value Fund(G)	-11.54%	11.48%	23.82%
L&T Infrastructure Fund(G)	-16.52%	14.98%	24.34%
L&T Large and Midcap Fund(G)	-11.10%	9.69%	16.72%
L&T Midcap Fund(G)	-13.42%	14.18%	26.71%
L&T Tax Advantage Fund(G)	-6.39%	12.89%	17.59%

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

5-Year Financial Ratios of All Equity L&T Mutual Fund Schemes

Mutual Fund Scheme	Sharpe Ratio (5Y)	Jensen’s Alpha (5Y)	Treynor Ratio (5Y)	Beta (5Y)
L&T Business Cycle Fund(G)	–	–	–	–
L&T Emerging Businesses Fund(G)	–	–	–	–
L&T Equity Fund(G)	0.422	3.89%	0.061	1.00
L&T India Large Cap Fund(G)	0.267	1.77%	0.038	0.99
L&T India Value Fund(G)	0.765	10.84%	0.122	1.09
L&T Infrastructure Fund(G)	0.645	11.19%	0.107	1.27
L&T Large and Midcap Fund(G)	0.445	4.66%	0.067	1.00
L&T Midcap Fund(G)	0.969	14.19%	0.162	1.04
L&T Tax Advantage Fund(G)	0.544	5.49%	0.081	0.95

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

Debt Funds

A debt fund is a type of mutual fund which predominantly invests in fixed-income securities such as government securities, corporate bonds, certificate deposit and other money market instruments. According to the Income Tax Act, any fund which invests less than 65% of its total assets in equities is termed as a debt fund. You can read more about debt funds here.

Trailing Returns of All Debt L&T Mutual Fund Schemes

Mutual Fund Scheme	1 Year Return	3 Year Return	5 Year Return
L&T Banking and PSU Debt Fund(G)	4.91%	7.22%	7.67%
L&T Cash Fund(G)	5.46%	5.85%	6.68%
L&T Credit Risk Fund(G)	4.10%	7.34%	8.61%
L&T Flexi Bond Fund(G)	2.59%	6.66%	8.21%
L&T Gilt Fund(G)	1.44%	6.17%	8.54%
L&T Liquid Fund(G)	7.22%	7.26%	7.89%
L&T Low Duration Fund(G)	5.36%	8.02%	8.66%
L&T Money Market Fund(G)	6.76%	7.92%	8.18%
L&T Resurgent India Bond Fund(G)	2.18%	6.59%	–
L&T Short Term Bond Fund(G)	4.68%	6.62%	7.75%
L&T Triple Ace Bond Fund(G)	2.45%	5.34%	6.66%
L&T Ultra Short Term Fund(G)	6.60%	7.42%	8.03%

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

Rolling Returns of All Debt L&T Mutual Fund Schemes

Mutual Fund Scheme	1 Year Rolling	3 Year Rolling	5 Year Rolling
L&T Banking and PSU Debt Fund(G)	4.93%	7.13%	7.58%
L&T Cash Fund(G)	5.38%	5.75%	6.58%
L&T Credit Risk Fund(G)	4.12%	7.25%	8.60%
L&T Flexi Bond Fund(G)	2.34%	6.79%	8.42%
L&T Gilt Fund(G)	1.25%	6.31%	8.74%
L&T Liquid Fund(G)	7.13%	7.13%	7.76%
L&T Low Duration Fund(G)	5.34%	7.91%	8.63%
L&T Money Market Fund(G)	6.72%	7.81%	8.09%
L&T Resurgent India Bond Fund(G)	2.10%	6.58%	–
L&T Short Term Bond Fund(G)	4.60%	6.54%	7.71%
L&T Triple Ace Bond Fund(G)	1.95%	5.33%	6.78%
L&T Ultra Short Term Fund(G)	6.53%	7.30%	7.93%

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

5-Year Financial Ratios of All Debt L&T Mutual Fund Schemes

Mutual Fund Scheme	Sharpe Ratio (5Y)	Jensen’s Alpha (5Y)	Treynor Ratio (5Y)	Beta (5Y)
L&T Banking and PSU Debt Fund(G)	-0.642	0.06%	-0.071	0.130
L&T Cash Fund(G)	-5.482	-1.70%	-1.745	0.011
L&T Credit Risk Fund(G)	0.005	0.84%	0.001	0.118
L&T Flexi Bond Fund(G)	-0.105	2.28%	-0.011	0.365
L&T Gilt Fund(G)	-0.012	3.36%	-0.001	0.466
L&T Liquid Fund(G)	-2.507	-0.58%	-0.661	0.011
L&T Low Duration Fund(G)	0.061	0.67%	0.007	0.086
L&T Money Market Fund(G)	-0.833	-0.10%	-0.101	0.041
L&T Resurgent India Bond Fund(G)	–	–	–	–
L&T Short Term Bond Fund(G)	-0.679	0.01%	-0.074	0.114
L&T Triple Ace Bond Fund(G)	-0.488	0.93%	-0.051	0.382
L&T Ultra Short Term Fund(G)	-1.034	-0.23%	-0.132	0.043

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

Hybrid Funds

A hybrid fund, earlier known as balanced fund, is a mutual fund which invests in two or more asset classes e.g. equity, debt, gold, etc. You can read more about hybrid funds here.

Trailing Returns of All Hybrid L&T Mutual Fund Schemes

Mutual Fund Scheme	1 Year Return	3 Year Return	5 Year Return
L&T Arbitrage Opp Fund(G)	6.34%	6.17%	–
L&T Conservative Hybrid Fund(G)	-0.06%	5.39%	7.57%
L&T Dynamic Equity Fund(G)	3.68%	4.70%	13.44%
L&T Equity Savings Fund(G)	0.40%	5.54%	8.43%
L&T Hybrid Equity Fund(G)	-4.31%	8.11%	15.64%

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

Rolling Returns of All Hybrid L&T Mutual Fund Schemes

Mutual Fund Scheme	1 Year Rolling	3 Year Rolling	5 Year Rolling
L&T Arbitrage Opp Fund(G)	6.12%	6.07%	–
L&T Conservative Hybrid Fund(G)	-0.28%	5.48%	7.80%
L&T Dynamic Equity Fund(G)	2.79%	5.37%	13.99%
L&T Equity Savings Fund(G)	-0.74%	5.56%	8.61%
L&T Hybrid Equity Fund(G)	-5.42%	8.57%	16.24%

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

5-Year Financial Ratios of All Hybrid L&T Mutual Fund Schemes

Mutual Fund Scheme	Sharpe Ratio (5Y)	Jensen’s Alpha (5Y)	Treynor Ratio (5Y)	Beta (5Y)
L&T Arbitrage Opp Fund(G)	–	–	–	–
L&T Conservative Hybrid Fund(G)	-0.246	-0.33%	0.460	-0.022
L&T Dynamic Equity Fund(G)	0.531	5.91%	0.800	0.061
L&T Equity Savings Fund(G)	-0.035	0.40%	0.368	-0.005
L&T Hybrid Equity Fund(G)	0.641	8.50%	1.049	0.067

All the above-mentioned data is as on 31 October, 2018. Source: Pulse Labs

Best L&T Mutual Funds

1. L&T Mid Cap Fund

Inception Date: August 09, 2004

Fund Manager: Mr S. N. Lahiri (since 2013) & Mr. Vihang Naik (since 2016)

AUM: Rs. 3,095 crore

Fund Category: Mid Cap

Fund Benchmark: Nifty Midcap 100 TRI

Expense Ratio: 2.35%

Returns	1 Year	3 Year	5 Year
Trailing Returns	-4.27%	13.55%	27.63%
Rolling Returns	-0.47%	17.15%	29.95%
Category Average	-3.66%	9.04%	23.27%
Benchmark Returns (NIFTY Midcap 100 TRI)	-4.32%	11.00%	21.02%

(Data as on September 30, 2018; Source: Pulse Labs)

L&T Mid Cap Fund is a conservative mid cap fund which has the third highest debt and cash holding in the mid cap fund category. It has around 12% of its total assets invested in debt and cash. This indicates the fund manager’s relatively cautious approach towards market valuations and gives him room to maneuver in case there is a market fall. In equities, the scheme has around 4% in large caps, 75% in mid caps and around 9% in small caps. The scheme has given impressive returns in both 3 year and 5 year periods, outperforming both its category average and its benchmark in both the periods. The scheme outperformed its benchmark during the 5 year period by a staggering margin of nearly 6%. The scheme has maximum exposure to Financials (10%), Cement (8%), and Industrial Products (8%). The scheme’s top company holdings are Bharat Financial Inclusion Limited (3%), Berger Paints India Limited (3%), and Emami Limited (3%). The scheme is a must have fund in the mid cap category considering its consistent impressive performance.

2. L&T Emerging Businesses Fund

Inception Date: May 12, 2014                  

Fund Manager: Soumendra Nath Lahiri

AUM:  Rs. 5538.95 crores

Fund Category: Small Cap Equity

Fund Benchmark: S&P BSE Small Cap Index TRI

Expense Ratio: 2.40%

Returns	1 Year	3 Year	5 Year
Trailing Returns	-1.72%	18.00%	_
Rolling Returns	3.48%	22.52%	_
Category Average	-1.19%	14.82%	28.55%
Benchmark Returns (S&P BSE Small Cap Index TRI)	-1.80	10.92%	9.29%

(Data as on September 30, 2018; Source: Pulse Labs)

Though a relatively recent entrant in the small cap space (launched May 2014), L&T Emerging Businesses Fund has proven itself as one of the top performers and one of the most aggressive investments options in the category. The scheme’s 1 year and 3 year returns at -8.85% and 18.34% show significant outperformance when compared to benchmark (S&P BSE Small Cap TRI) returns of -16.40% and 10.30% for the same periods (as of 13th November 2018). As of 31st October 2018, this scheme had cash/cash equivalent allocation slightly less than 5% which is in line with many of its category peers. Over the past year, this scheme has pared its midcap allocation and increased its small cap investments to just over 65% (as of October 2018) in order to comply with small cap equity fund regulations as per SEBI guidelines.

Notably, L&T Emerging Businesses Fund has nil exposure to large cap equities even though small cap funds are allowed to invest up to 35% of assets in large cap stocks. This is however in line with the scheme’s focus on investing in just emerging businesses and sectors which predominantly occupy the mid and small cap space. While this aggressive focus on mid and small cap stocks has the potential to provide investors with substantially high returns during bullish markets, it also significantly increases the potential volatility of investments made into the scheme. As of 31st October 2018, sectors featuring the top weights in this scheme’s portfolio include engineering (13%), chemicals (13%), services (11%), financial (10%) and metals (10%) – many of which have been beaten down in the past year but are set for a potential rebound as domestic demand picks up. Based on its track record so far, this scheme may be most suitable for aggressive investors seeking a long term investment solution in the small cap funds space.

3. L&T India Value Fund

Inception Date: Jan, 2010            

Fund Manager: Venugopal M.

AUM:  Rs. 8450.23 crore

Fund Category: Value Oriented Equity

Fund Benchmark: S&P BSE 200 TRI

Expense Ratio: 2.27%

Returns	1 Year	3 Year	5 Year
Trailing Returns	-1.15%	11.90%	24.72%
Rolling Returns	2.28%	14.52%	26.66%
Category Average	-1.87%	10.82%	20.93%
Benchmark Returns (S&P BSE 200 TRI)	-1.80%	10.92%	10.01%

(Data as on September 30, 2018; Source: Pulse Labs)

One of the largest value-oriented funds in India by AUM, the L&T India Value Fund has historically maintained an aggressive stance by maintaining relatively high exposure to mid-cap securities. But in the past year it has grown significantly large cap heavy with close to 60% allocation while maintaining mid cap allocation of around 30% of total assets (as of 31st October 2018). The cash/cash equivalent allocation for this fund as of 31st October 2018 is 3.11% which is lower than the category average and may indicate a potential liquidity problem for the scheme in case of increased redemption pressure during market corrections in the future.

When it comes to making sector-specific investments, this scheme features highest exposure to the financial sector with allocation of over 20% of total assets followed by construction, technology and healthcare which constitute 15%, 10% and 8% of total portfolio assets respectively. The stocks that currently feature over 5% allocation in the scheme portfolio include Reliance and ICICI Bank followed by Infosys which features allocation of just under 5% of total scheme assets. In effect, the sectors that this scheme is currently invested are those that were available at potentially cheap valuations during the previous year but have the potential to recover significantly in the future. This is what make it a suitable choice for risk tolerant investors seeking a long term value-oriented investment option.

4. L&T Hybrid Equity Fund

Inception Date: February, 2011               

Fund Manager: S.N. Lahiri, Shriram Ramanathan and Karan Desai

AUM: Rs. 10,656.18 crore

Fund Category: Equity Oriented Hybrid Fund

Fund Benchmark: 70% S&P BSE 200 TRI Index & 30% CRISIL Short Term Bond Fund Index

Expense Ratio: 2.22%

Returns	1 Year	3 Year	5 Year
Trailing Returns	1.13%	8.85%	17.69%
Rolling Returns	4.10%	10.60%	18.40%
Category Average	2.77%	9.11%	15.43%
Benchmark Returns (70% S&P BSE 200 TRI Index & 30% CRISIL Short Term Bond Fund Index)	2.56%	10.85%	11.14%

(Data as on September 30, 2018; Source: Pulse Labs)

Staying true to its label of an aggressive hybrid fund, L&T Hybrid Equity Fund featured an equity allocation of close to 75% of total assets as of 30th September 2018, which is higher than most of its category peers. A major portion of this equity allocation is however targeted at large cap equities which constitute over 50% of the scheme’s portfolio with midcap securities accounting for an additional 18% and small caps for around 7% of total scheme assets. When it comes to sector-wise allocation, the fund features high exposure to the financial sector with allocation of around 25% of total assets. Other sectors that this scheme has relatively high exposure to include construction (8% of scheme assets), technology (7% of assets) and healthcare (5% of scheme assets). These focus sectors have undergone correction in the past year which is one of the key reasons why the fund has posted 1 year returns of around -1.57% as of 19th November 2018, which is in line with average returns of -1.09% posted by the category during the same period.

On the other hand, 5 year returns of this scheme were recorded at over 17% which indicates outperformance by the scheme in the long term when compared to its benchmark which posted returns of around 14% for the same period (as of 30th September 2018). But the stocks in these sectors have started showing slow yet steady recovery in recent times and this bullish trend is expected to be beneficial for investors of this scheme going forward. The debt investments of this scheme, which accounted for 20% of total assets (on 30th September 2018), primarily consist of high quality instruments such as AAA-rated securities (14% of total assets) and sovereign instruments (5% of total assets). Thus this scheme may be considered an ideal investment for conservative investors seeking to growth their wealth at an optimal rate during bull markets while containing losses better than pure equity investments during periods of equity market corrections.

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