Mutual funds for long-term investors -- II

In the second part of this five part series on top 25 mutual funds analysed by Value Research we produce the next best five mutual funds that investors can put their money in for the long term.

Interestingly, three of these five belong to HDFC Mutual Fund. They are HDFC Equity, HDFC Prudence and HDFC Growth at number 8,9 and 10 respectively.

DSPML's T.I.G.E.R. comes at number 6 followed by Franklin India Prima Plus at number 7.

Individual needs may vary so view them in conjunction with your overall portfolio and risk profile.

# 6: DSPML T.I.G.E.R. Reg -- Capital maker

Equity: Diversified

Information: www.dspmlmutualfund.com
NAV: Rs 45.857 (28/09)
Entry Load: 2.25 per cent for investment less than RS 5 crore
Exit Load: 0.5 per cent for redemption within 179 days
Expense Ratio: 2.01 per cent
Launch: May '04
Plans: Growth, Dividend
Min Investment: Rs 5,000
Benchmark: BSE 100
Portfolio Manager: Soumendra Lahiri

The name might appeal to aggressive investors, when in actuality the conservative ones will feel right at home here. The broad investment mandate, large-cap tilt and intense diversification should alleviate all their fears. An acronym for The Infrastructure Growth and Economic Reforms, the fund focuses on sectors that are likely to prosper from growth related to economic reforms and infrastructure development.

With this as a starting point, the fund manager follows a top-down approach (for sector selection) before resorting to bottom-up stock picking. Unlike other infrastructure offerings, its broader mandate has enabled it to tap into sectors that core infrastructure funds do not -- healthcare, FMCG, textiles, consumer non-durables.

A high degree of diversification, typical of equity funds in the DSPML family, is evident.

At 72, the number of stocks in its portfolio is far more than any other fund focused on infrastructure/core sectors. In fact it is probably too high for a fund with a relatively focused investment objective.

Nevertheless, that has not diluted the return generating capabilities of the fun. It remains among the top quartile across the six-month, one year and three-year horizon.

Owing to its superb run, assets have grown by 130 per cent over the last one year to Rs 2,600 crore, making it the 12th largest diversified equity fund.

Stocks like Reliance Industries, Larsen & Toubro and BHEL have been long-term favourites. While there is a reasonable amount of continuity in its top holdings, considerable churning takes place among the rest.

Great returns on a predominantly large-cap, growth-oriented, infrastructure-led portfolio is what T.I.G.E.R is all about.

#7: Franklin India Prima Plus -- Quality control

Equity: Diversified

Information: www.franklintempletonindia.com
NAV: Rs 177.2704 (28/09)
Entry Load: 2.25 per cent for investment less than Rs 5 cr
Exit Load: 1 per cent for inv.