Even as broader equity indices in the country have touched new highs, several large-cap funds have underperformed in the first six months of the current calendar year. Out of 30 large-cap schemes, only four have managed to give positive returns in the period of January-June 2018, suggests data from investment research firm Morningstar.
The agency’s category benchmark for large-cap funds, S&P BSE 100 India TRI have given returns of 0.34% in the first six months of the current calendar year, while several of the funds have given negative returns in the range of 3-7%.
The funds which have outperformed the Morningstar category benchmark are Axis Bluechip Fund, Edelweiss Large Cap, Canara Robeco Large Cap Equity and Invesco India Large Cap.
Navneet Munot, executive director & chief investment officer at SBI Mutual Fund, said, “Large cap has seen narrow rally as only handful of stocks have driven Sensex or Nifty, while the performance down the capitalisation curve has not been good. We believe that, as and when this rally becomes more broad-based it will generate alpha.”
The schemes that has outperformed the benchmark have larger exposures into the stocks that have been driving the markets.
If we look at Axis Bluechip Fund that has topped the chart with returns of around 7% during the six months period, it has invested around 36% of its corpus in these six scrips, as per the portfolio disclosure for June 2018 while remaining schemes that have outperformed have exposure in the range of 20-40% in these top stocks.
Another set of stocks, both in the Nifty 50, that have been stellar performers are Bajaj Finserv and Bajaj Finance, which has gained 11.3% and 30.7%, respectively in the same time frame.
Jinesh Gopani, head — equity at Axis Mutual Fund, said, “If you see our philosophy we always invest in quality stocks, companies which are leader or probable leader in their space. That theme has played out very well for us since our inception and in the past few years.”
He added that private banks on retail side, select NBFCs, auto and auto ancillary along with consumption were there in our portfolio for many years now and that has played off very well. “Also good investments in top IT company has also helped the fund.”