Most long only alternative investment funds (AIFs) outperformed the Nifty50 in July. These funds delivered an average return of 5.7 per cent as compared with 2.9 per cent for the benchmark index, shows the data from PMS Bazaar for Category 3 AIFs, reported Business Line.
Long short funds gave average category returns of 1.6 per cent. Of the 61 long only funds, all except seven managed to beat the Nifty50 returns of 2.9 per cent in July while only five of the 20 long short funds beat the benchmark.
A long only fund takes only long positions. A long short fund takes both long and short positions in the market and uses several alternative investing techniques such as leverage, derivatives, and short positions, to purchase relatively undervalued securities and sell overvalued ones.
Aequitas Equity Scheme I was the best performer during the month, with returns of 15.3 per cent. Malabar Value Fund was No 2, with returns of 14.6 per cent, followed by I Wealth Fund 2 (12 per cent).
For the one year period, Aequitas Equity Scheme I was the best performer, with returns of 75 per cent. Abakkus Asset Managers Emerging Opportunities Fund I and Oculus Capital Growth Fund were the other two top performers for the one year period, with gains of 40.3 per cent and 37.8 per cent, respectively.
Among the long short funds, Volvin Growth Fund Active Rabbit was the top performer in July with returns of 4.2 per cent. For a one year period, Whitespace Alpha’s Whitespace Fund 1: Equity Plus topped the charts with returns of 26 per cent.
The broader markets, S&P BSE Midcap and S&P BSE 250 SmallCap, were up 5.7 per cent and 7.4 per cent respectively, in July. Foreign portfolio investors (FPIs) invested $5.7 billion during the month, while domestic institutional flows were marginally negative to the tune of $0.3 billion. The pharma sector was the top performer, with the index rising 9 per cent, followed by the PSU, power, and real estate sectors.
The market has had a strong run up since April, and there is a fair chance that it can take a breather at current levels, said Sunil Singhania, founder of Abakkus Asset Manager, in a recent note to investors.
He reckons valuations are 10 per cent higher than the long term average, and any correction might be short and swift.