What Are the Parameters to Know the Growth of L&T Emerging Businesses Fund?

Investing directly in stocks is certainly not for everyone. It requires lots of knowledge, time, and skill which makes it a specialised activity. Therefore, SEBI comes up with the idea of mutual funds, where all you need to do is invest, and your capital will get further invested by the professionals in the market after performing a lot of research. But here also, we just cannot jump onto any fund, it needs proper planning as well as research that is conducted on a few parameters.

So, here we are discussing these parameters and research the growth of capital in L&T Emerging Businesses Fund. It is because you are investing your hard-earned money and you need healthy practices to pick it up. These parameters are:

1. Long Term Performance

When researching and analysing any mutual fund scheme, it is better to look its past performance. It is because only the long-term performance can help you to know how the fund can perform across various market cycles. So, if we have a close look at the performance of L&T Emerging Businesses Fund G, then we can see that it has performed well all these years. It is a late entrant in the market but has outperformed its benchmark as well as category. It has also managed the losses in a much better way as compared to index and peers in the year 2018. 
It has given the highest annualised returns in the small-cap category in the past three years with 16.01%. However, the fund has entered late in the market, so investors need to wait and see how it perform in the long run. 

2. Fund Manager’s Track Record

In mutual fund’s performance attribution, a fund manager plays very crucial role, and most of the times, he/she is more important than the market itself. It is because the strategies and past record of the fund manager help to know how a scheme can perform. 
L&T Emerging Businesses is managed by Mr Soumendra Nath Lahiri, CIO of L&T Mutual Fund who is holding the fund since launch, i.e., April 2014. The funds under his leadership are performing so well and offering high returns to the investors, no matters if they are pure equity, thematic, or hybrid funds. He picks the stocks on a growth basis which are available at a reasonable price in the long-term market. All his strategies have played well for the funds under him, and besides this, he has 18 years of experience in equity research and portfolio management, which is also helping the fund to perform its best in all the market conditions. 

3. Portfolio Holdings

A mutual fund's holdings represent the securities in the form of stocks and bonds held in the fund. So, always look at how the fund has diversified its portfolio to reduce risk and increase the returns. The portfolio of L&T Emerging Businesses Fund- Growth Plan holds 87 stocks currently with maximum exposure to small-cap companies. In the term of sector allocation, the fund has a maximum allocation in engineering, chemicals, services, metals and finance companies which seems to be a cyclical portfolio and investors can get the best returns from these sectors if they stay invested for a long-term. Its overall corpus is also invested in the money market securities to deal with the immediate requirement of liquidity. 

4. Risk Associated

Before investing in any fund, it is necessary to know the risk associated with it because it determines the investment tenure as well as help investors to know if they can take risk or not. L&T Emerging Businesses Scheme is a small-cap category fund which is a high-risk plan. The risk measure of the fund depicts that it can manage the market downside much better than peers and also reduce the negativity in the portfolio. Besides this, it is less risky compared to the index, as its Standard Deviation (SD) is lower than the latter’s. So, investors who have an investment horizon of 10 years at least should invest in it. 

Many mutual fund investors pick the schemes randomly, but they should follow these parameters so that they will not regret further. Besides that, L&T Emerging Businesses Fund- Regular Plan has proved itself over the time, and the same growth investors can expect from it in future as well. These are not thumb-rules, but these parameters will help the most to investors. 

Read to know the parameters that are providing the future growth perspective of L&T Emerging Businesses Fund.