Canara Robeco Emerging Equities Fund: Wealth creation track record

Canara Robeco is one of the oldest mutual funds, started in 1993, and one of the most popular names in the mutual fund industry. Very few mutual fund schemes have a vintage of more than 20 or 30 years, along with a good track record. One such scheme is the Canara Robeco Emerging Equities Fund which is a Large and Midcap fund. In the past, this scheme was primarily mid-cap-oriented scheme, though it also had substantial allocations to large caps. It was one of the best-performing diversified equity funds for many years.

Wealth Creation with Canara Robeco Emerging Equity Fund

If you had invested a lumpsum Rs 1 lakh at the inception of the fund, the value of your investment would have grown 22x to Rs 22.38 lakhs as on 20th May 2024 giving a CAGR of 17.58%. The chart below shows the returns of the fund in comparison to its benchmark index Nifty Large Midcap TRI and versus other popular modes of investment like a bank fixed deposit, gold and PPF. You can see that the fund has a track record of alpha creation for its investors since its inception.

Source: Advisorkhoj research as on 20^th May 2024

A Rs 10,000/- SIP started in the fund at its inception would have grown to a value of Rs 1.78 Cr against a cumulative investment of Rs 23.10 lakhs.

Source: Advisorkhoj research as on 20^th May 2024

What are Large and Midcap funds and why should you invest in them?

Financial advisors often stress the importance of diversifying your portfolio for better returns. Investing in the Large and Mid-cap funds helps you build up a portfolio with diversification across large and Mid-cap funds.

According to SEBI’s 2017 directive, large and midcap schemes must mandatorily invest at least 35% of it’s assets in large-cap stocks and at least 35% of their assets in midcap stocks. SEBI classifies the top 100 stocks by market capitalization as large-cap stocks and the next 150 stocks by market capitalization as midcap stocks. SEBI’s mandate for large and midcap schemes is quite flexible allowing considerable freedom for fund managers to change the market cap mix according to their outlook. Depending on market conditions and their outlook, fund managers have the flexibility of changing their large and midcap allocations from 35% to 65%. Fund managers can also make substantial allocations to small caps (up to 30%).

The chart below shows the value of Rs 10,000/- SIP started since January 1^st 2014 in Nifty Large Midcap 250 TRI (as on 20^th May 2024) compared to the Large Cap index (Nifty 100 TRI) and also the broad market index (Nifty 500 TRI). You can see that large and midcap index outperformed large caps and the broad market index.

Source: Advisorkhoj research as on 20^th May 2024.

Canara Robeco Emerging Equities Fund Regular Growth Option

The Canara Robeco Emerging Equity Fund is an equity fund in the large and Midcap category and was started in March 2005. See the image below shows the fund details pertaining to the growth option.(data as on April 30^th 2024)

Source: Fund Factsheet as on April 30^th 2024

Performance over long investment tenures across market conditions

The charts below show the daily rolling returns of Canara Robeco Emerging Equities Fund versus the benchmark index over different investment tenures since the inception of the scheme. You can see that over longer investment tenures, the scheme has been able to consistently beat the benchmark across different market conditions.

Source: Advisorkhoj research as on 20^th May 2024

Source: Advisorkhoj research as on 20^th May 2024

Portfolio Allocation

The fund allocation is distributed across market capitalization with a large cap bias of 51.17% of the allocation. Apart from Large, mid and small caps, the fund also invested 3.33% of its portfolio in Debt, Cash and other securities. The top sectors and top holdings that the fund invests in are represented in the chart below.

Source: Fund Factsheet as on April 30^th 2024

Why invest in the Canara Robeco Emerging Equities fund?

The fund has growth and quality orientation. As a result, the fund saw smaller drawdown in the COVID-19 crash.

The fund has 51% allocation to large caps, while the category average large cap allocation is 47%. The small cap allocation of the fund is lower than the category average. Short-term underperformance can also be a consequence of various factors like fund manager’s strategy; some high conviction bets, especially the value stocks may not necessarily play out in the short term, but it may give excellent returns and alpha in the long term. There are several reasons why we like the scheme. The same is mentioned as follows:

• Bottom-up stock picking endeavors to select the best among the emerging companies which forms part of the portfolio.


• Fund manager’s endeavor to identify companies which have the potential to become leaders of tomorrow in their respective sectors.


• The fund invests with a long-term view, staying away from herd behavior, chasing short term profits, running after certain market spurs. Such herd behavior/short term approach tends to be very risky and may not pay off in the long term.


• The scheme has a long-term track record of strong performance and alpha creation.

Who should invest in the Canara Robeco Emerging Equity Fund?

The fund is suited for the following investors:

• Investors looking for capital appreciation over long investment tenures.


• Investors with minimum 5 years of investment tenure.


• Investors with a very high-risk appetite.

Consult your financial advisors or mutual fund distributor if Canara Robeco Emerging Equities Fund is suitable for your investment needs.