Despite equity markets remaining volatile for the year till
date, over 75% of the equity schemes have managed to outperform their
respective benchmark indices by huge margins. According to data provided by
Value Research, out of over 340 equity schemes in the country, around 246
schemes managed to outperform the benchmark indices.
Interestingly, many mid and smallcap equity funds have
managed to give better return then large-cap and thematic schemes. Some of the mid-small
cap fund like Magnum Emerging Business, Mirae Emerging Bluechip, HDFC Mid-cap
opportunities, Reliance Small Cap and DSP BlackRock Micro Cap have given
negative returns in the range of 5-15% till year to date. During the same
period their benchmark indices have fallen by about 25-35% while largecap index
Sensex was down by 22%. According to fund managers, conservative investing
coupled with aggressive cash calls taken during the market fall helped give
better returns than that of their respective benchmarks.
Neelesh Surana, head of equity, at Mirae MF, says, “Last one
year overall environment was very challenging following high inflation and
surging interest rate scenario. In such a situation, we had stayed away from
sectors such as real estate, infrastructure and construction, which helped us.”
Soumendra Nath Lahiri, head equities, at Canara Robeco MF,
says, “The construction of our portfolio was defensive as equity markets were
volatile. In the past few months we had remained underweight on interest rates
sensitive sectors, while hiking exposure to consumption and cement sector which
helped us to generate better returns.” “It was not only stocks picking that
helped get better returns, but investing in companies which have low gearing
and good cash flows” added Surana.
Also many equity funds were seen investment in non cyclical
sectors such as pharma and consumer goods which helped arrest the fall in NAV
values in the downturn. According to market participants, some schemes were
seen sitting on cash of over 15-20% at one point in time which was gradually
reduced at lower market values.
Some fund managers changed asset allocation in favour of
high interest yield debt which helped generate better returns. However some of
the funds like JM Core 11 (-33.99%), JM Basic (-36.25%), Reliance
Infrastructure Retail (-40.80) and HSBC Mid-cap Equity (-37.52%) saw major
erosion of their NAVs in the current calendar year.
Source: http://www.financialexpress.com/news/about-75-of-equity-funds-beat-benchmarks/879657/0
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