Most long-only funds outperform Nifty50 in May

Most long-only funds outperform Nifty50 in May

Long-only alternative investment funds (AIF) have outperformed long-short funds in the month of May.

The former gave average category returns of 4.94% compared with 1.98% of the latter, data from PMS Bazaar for Category 3 AIFs showed.

Incred Asset Management’s India Value and Growth Fund – I was the second best performer with returns of 10.1%, followed by Alchemy Capital’s Leaders of Tomorrow, which returned 8%.

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For the one-year period, Aequitas Equity Scheme I was the best performer with returns of 43.3%. The scheme, managed by Aequitas Equity Fund, is chart topper for the three-year period as well, with returns of 69.1%.

Guardian Capital Partners Fund – Opportunities Scheme and Carnelian Asset Management’s Structural Shift Fund were the other two top performers for the one-year period, with gains of 25% and 24.8%, respectively.

Apart from Aequitas, two of Abakkus Asset Manager’s schemes—Emerging Opportunities Fund I and Growth Fund I—are chart toppers in the three year period with returns of 52.8% and 40.4%, respectively.

Among the long-short funds, Avendus Capital’s Enhanced Return Fund-II is the topper in May with returns of 6.4%.

For a one-year period, PlusWealth Capital Management’s PlusWealth Assets has topped the charts with returns of 22.7%.

For a three-year period, Whitespace Alpha’s Whitespace Fund 1 – Equity Plus is the topper with gains of 35.5%.

Indian equity markets continued their positive momentum in May amid improving domestic macros, better than expected Q4FY23 earnings, US debt ceiling extension and strong inflows from foreign institutional investors.

The broader markets represented by S&P BSE Midcap and S&P BSE 250 SmallCap rose 6.3% and 5.4%, respectively, during the month. Market observers believe that the global interest rate increase cycle is more or less done and a rate cut may be in the offing in the early part of the year.

“From an Indian perspective, economic indicators are coming in quite positive. Corporate performance has been good and the outlook also appears decent. The move globally from asset allocators to move away from China to other markets like India is also being felt, with a net inflow of almost $5 billion from foreign investors into Indian equities in the month of May. There is though a forecast of El-Nino impacting Indian monsoon and that is the key monitorable in the near term,” said Sunil Singhania, founder of Abakkus Asset Manager.

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Singhania, however, wants investors to focus on fundamentals as the broader markets have been seeing huge momentum.

“We continue to maintain our recent view of being positive on Indian equities and any global event led correction should be used as an opportunity to add Indian equities. Fundamentals over momentum is what we would advise,” he said.

A long-only fund takes only long positions. A long-short fund takes both long and short positions in the market and use several alternative investing techniques such as leverage, derivatives, and short positions to purchase relatively undervalued securities and sell overvalued ones.