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JM Mutual Fund’s equity schemes are giving double-digit returns in last one year. Should you invest?

JM’s equity schemes are invested mainly in bluechip stocks like Bajaj Finance, HDFC Bank, Maruti Suzuki India, Asian Paints, ITC whose recent outperformance is reflecting in its one year performance.

, ET Online|
Updated: Oct 30, 2019, 11.26 AM IST
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Most equity schemes of JM Financial Mutual Fund are topping the charts in their respective category with double-digit returns in the last one year. JM Tax Gain Fund is topping the ELSS category with 25% returns in the last one year, JM Value Fund is ranking number one with 18% returns in one year. Another scheme, JM Multicap Fund, is at the fourth position in the category with 24% returns. JM Core 11 Fund has also given superior returns of 23%.

Does this mean the fund house is on the way to stage a comeback? In other words, can investors bet on these schemes?

“The performance is largely in terms of the segment of the market which is brighter. Here high growth, high value companies have moved largely the performance of these schemes,” says Kaustubh Belapurkar, Director, Fund Research, Morningstar Investment Adviser India.

JM’s equity schemes are invested mainly in bluechip stocks like Bajaj Finance, HDFC Bank, Maruti Suzuki India, Asian Paints, ITC whose recent outperformance is reflecting in its one year performance.

Mutual fund advisors and distributors say they are still not ready to bet on the AMC. Many advisors say they do not track the schemes of the AMC. They also claim they don’t have any communications or interaction with the AMC.

“Since there is no communication from the AMC on anything and we have bigger AMCs which promote a healthy communication, we do not track JM schemes. The schemes started underperforming after Sandip Sabharwal left the AMC in around 2008. We stopped tracking the schemes after that,” says Prashant Maurya, partner, Citrine Financial Advisors.

JM Mutual Fund was not available for comments.

The schemes are quite tiny as well. Mutual fund advisors say it is another reason to ignore the schemes from JM Financial Mutual Fund.

“These schemes do not have enough unique investors. In this case if one investor moves out it can impact that scheme in a huge way,” says Maurya.

JM Tax Gain Fund manages an AUM worth Rs 33 crore, JM Multicap holds assets worth Rs 139 crore, JM core 11 holds Rs 53 crore and JM Value Fund has Rs 124 crore assets.
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