Largecap schemes will continue to get attraction and do well going forward as long as the issues in the overall mutual fund investment industry remains, said Aditya Birla Mutual Fund Co-CIO Mahesh Patil.
Although midcaps performed well in CY17, largecaps started doing well from December 2017. Also, largecaps and midcaps have alternately performed well in different periods in the past. Hence, it is very normal to witness such phases. At present, the mutual fund industry is facing global uncertainties in terms of currency risk, trade wars, and increasing oil prices.
Largecap schemes are performing well and topping the charts with 17 percent average returns in the past one year. The topmost seven to eight largecap stocks have accounted for over 100 percent of the YTD Nifty returns.
But, most of the largecap schemes including Aditya Birla Sun Life Frontline Equity Fund showed underperformance with respect to their benchmark. Aditya Birla Mutual Fund Co-CIO Mahesh Patil gives the reasons for this, during an interview.
Largecaps will generally hold an extensive portfolio in order to maintain diversification. Therefore, most of the schemes under the category are underperforming their benchmark, said Patil.
However, Patil also feels that this trend is a passing phase and will change when the broader market begins participating in the rally.
As far as equities schemes are concerned, it is always better to assess the performance over a longer time horizon. Most of the largecap schemes including the Aditya Birla Sun Life Frontline Equity Fund have regularly outperformed their benchmark when considering their performance over three years to five years, stated the Co-CIO.
Most of the largecap schemes, including that of the Aditya Birla fund house, were deploying at least 80 percent of assets in largecaps and were following the norms of SEBI even before re-categorization.
According to Aditya Birla Mutual Fund Co-CIO Mahesh Patil, there will be no material change in the manner in which the largecap schemes are managed. Hence re-categorization will not affect returns of the schemes under the category, reported The Economic Times.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]