The spotlight is on the winners in pooled asset investing after the benchmark surged three-fourths in eight months to scale the 13,000 peak Tuesday. Through the rally, in the large cap and multi cap categories, schemes of Axis, Mirae, and Parag Parikh Mutual Fund have outshone their peers.
In the large and mid cap category, schemes such as Axis Growth Opportunities and Mirae Asset Emerging Bluechip have been the top performers, beating their category average by 7-8% higher returns.
So, what did they do differently? First, fund managers in these fund houses have been extremely careful about maintaining a proper equation among three key variables: Cash levels of a scheme, investment allocations, and market movements. They maintained high cash levels when valuations outpaced conviction. For instance, a distributor points out that there was a point Axis Mutual Fund had a cash level of close to 10%, almost double of what rivals did. That enabled Axis schemes to jump into the ring when valuations plunged.
Similarly, fund houses such as Mirae stopped lump sum investments in its Emerging Equity scheme. This reduced redemption pressure and capped potential drop in the scheme’s returns.
Finally, in the large-cap category, low-cost passively-managed schemes focused on value investing have done considerably well. A case in point is the Nippon India ETF NV20, a fund focused on 20 companies that are built around the value theme, and ensured higher returns when investments into them surged through the upcycle.
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1 Comment on this Story
amit rai62 days ago
If MF is for long term , why compare performance of short term & declare winners ? Don't you think it's irrelevant and may hamper decision making of investors