Despite a volatile market in March, some Category 3 long-only Alternative Investment Funds (AIFs) surpassed the key benchmarks and delivered robust outperformance. Read to know more about the top performers.
The last month of the financial year saw the indices gyrate a bit. Despite the volatility, key market indices did manage to record moderate gains in March. The Nifty TRI gained 1.57% during the month, while the broader market BSE 500 TRI rose 0.86%.
A bunch of category 3 long-only Alternative Investment Funds (AIFs) went past the key benchmarks and delivered robust outperformance. Among the top 10 funds in the category, many strategies managed to give double the returns of the Nifty or higher in March and 1 to 2.5 percentage points more than the BSE 500 TRI during the month.
Category 3 long-only funds invest in firms that are listed in the exchanges and are available with ample liquidity. They do not have any rigid mandates and are thus unrestrained in their picks based on the fund manager’s perception of the markets.
During the month, 11 category III long-only funds managed to outperform the Nifty 50 TRI, while 15 strategies delivered better returns than the BSE 500 TRI.
The long-short category’s performance was a bit mixed. We had 5 such funds delivering more than the Nifty 50 TRI. Against the BSE 500 TRI, 12 funds outperformed in March.
Closed-ended funds did very well in the long-only category with seven of the top 10 being such schemes. However, open-ended strategies dominated the toppers’ chart in the long-short category during the month with nine in the top 10.
Top 10 long-only performers
In March, the top long-only funds scored above the standard benchmarks – Nifty 50 TRI and BSE 500 TRI.
As mentioned earlier, seven of the top 10 long-only funds were closed-ended, while the remaining three were open-ended.
Here is the list of the top 10 funds in the category 3 long-only funds segment.
Taking the first position was the Smart Alpha Sector Rotation strategy from Quest Investment Advisors with 4.4% returns for the month. The fund takes a multi-cap approach and looks to benefit from stock and sector rotation.
Next in the charts was the Opportunities Series – Atlas fund from Sundaram Alternates with 3.62% returns in March. This fund invests in 15-25 stocks across market caps with a mix of structural and cyclical picks.
Leaders of Tomorrow from Alchemy Capital Management took the third slot with 3.49% returns during the month. This fund invests in listed stocks, IPO and pre-IPO opportunities among a few other avenues.
Alchemy Capital Management’s other fund, Leaders of Tomorrow – 2, came fourth in March with 3.46% returns.
The High Growth Companies Fund from 360 ONE Asset Management was fifth on the list with 2.89% returns in the month. This fund invests 50-80% of its portfolio in secular growth stories and 20-50% in tactical segments.
The category’s performance vis-à-vis the Nifty 50 TRI and BSE 500 TRI are depicted below.
The performance of the top 10 long-only funds and the comparison with Nifty 50 TRI and BSE 500 TRI for March are depicted below.
Top 5 long-short funds
Long-short funds use fairly sophisticated investment strategies. They take into account many complicated quantitative and qualitative factors to decide their portfolio mix and use advanced strategies across derivatives and equities. These long-short funds seek lower volatility and robust returns over the medium to long term.
In March, funds in the segment gave 0.86% on average. As many as 12 funds outperformed the BSE 500 TRI, while five surpassed the Nifty 50 TRI. Barring one, all the other top funds were open-ended.
The top five long-short AIF schemes for March are depicted below.
Vasisth Capital’s Relative Value Fund came on top with 2.97% returns during the month. The fund provides diversification by taking exposure to market-neutral investments.
Taking the second spot was The Investment Trust of India's Long Short Equity Fund with 2.48% returns in March. This is a hedge fund and looks to beat the Nifty over a full market cycle while keeping volatility levels to the minimum possible.
ICICI Prudential Enhanced Dynamic Equity fund came in third with 2.26% returns in the month. It is an open-ended fund. This scheme seeks to use valuation metrics, cashflows and businesses with competitive advantages for its investment decisions.
Whitespace Alpha’s Fund I – Equity Plus took the fourth position with 2.18% returns during March. The fund invests in the Nifty 50 basket as well as in derivatives.
Dolat Capital Market’s Absolute Return fund was the fifth in the charts with 1.63% returns during the month.
The performance of long-short funds in March and the comparison with benchmarks are presented below.
Takeaway
March turned out to be fairly tough for the markets with pockets of outperformance. Apart from valuation concerns, the possibility of postponement in the Federal Reserve’s interest rate-cutting calendar kept the markets on tenterhooks. Back home, even the RBI sounded hawkish in the recent monetary policy review.
The rising geopolitical tensions with the Israel-Iran conflict have further increased volatility. Crude prices have spiked and may end up bringing back inflationary pressures. The corporate results season for the March quarter has begun and the initial results from the software majors show moderate revenue growth. The general elections have commenced and anxiety over their outcome may keep investors guessing for the next month or so.
With the progress of the fourth quarter results, geopolitical events and inflation’s trajectory would determine market moves for the coming weeks.
Note:
***Post Exp & Tax ; **Post Exp, Pre-Tax; ##Gross returns; ###Post Exp & Pre Perf.Fees & Tax; ^^ Post Exp & Tax and Pre Perf.Fees
Disclaimer: This Blog is made for informational purposes only and does not constitute an offer, solicitation, or an invitation to the public in general to invest in any of the Funds mentioned. All the Returns mentioned in this blog are provided by the respective asset management companies and may vary based on their reporting structure (Pre-tax, Post-tax, Post-expenses, etc.). PMS Bazaar has taken due care and caution in the compilation of data and information. However, PMS Bazaar doesn’t guarantee the accuracy, adequacy, or completeness of any information. Investors must read the detailed Private Placement Memorandum (PPM), including the risk factors, and consult your Financial Advisor before making any investment decision/contribution to AIF. This Blog has been prepared for general guidance, and no person should act upon any information contained in the document. PMS Bazaar, its affiliates, and their office, directors, and employees shall not be responsible or liable for any investment action initiated. This Blog is intended only for the personal use to which it is addressed and not for distribution.
Recent Blogs
Jan-2025 AIF Performance: Market Pressures Weigh on Returns, Long-Short Funds Outshine
January 2025 was a challenging month for Indian equities, and Category III Alternative Investment Funds (AIFs) reflected broader market headwinds. Several macroeconomic factors—including geopolitical tensions, currency depreciation, and US-led global trade disruptions—contributed to investor uncertainty. Additionally, corporate earnings for Q3FY25 were underwhelming, with the worst earnings downgrade ratio since Q1FY21.
Singularity on India’s New Fund of Funds: Implications for AIFs and Startup Investments
Singularity AMC, a leading provider of capital and differentiated market access for high-growth assets, shares its perspective on the government’s newly announced ₹10,000 crore Fund of Funds (FoF) and its potential to reshape India’s startup investment landscape.
.jpg)
PMS Performance in January 2025: A Challenging Month for Equity Strategies
While January’s numbers were largely in the red, investors should focus on long-term performance and diversification strategies to ride out volatility
AIFs in 2024: Decoding Resilience, Returns, and Art of Alpha Creation
The year 2024 was a pivotal one for India’s alternative investment funds (AIFs), reflecting their enduring appeal to sophisticated investors amidst an evolving economic landscape. Despite facing challenges from a more tempered equity market compared to 2023, AIFs continued to demonstrate their alpha-generation potential. With strategies tailored to navigate market complexities, these funds outperformed traditional benchmarks like the Nifty50 TRI, which posted a modest 10.09% return in 2024.
Resilient Returns: How PMS Strategies Thrived in a Dynamic 2024
PMS schemes shine in 2024 with record-setting performances; strategies navigated volatility, out-performed benchmarks, and strengthened investor confidence across the board
AIFs in Dec-2024: Long-Only Funds Outperform, Best Fund Clocks 56% Even As Markets Face Broad Declines
Selective stock-picking drives resilience and once again shows it is possible to outshine even in amid market downturn
Quant Investing vs Traditional PMS: Can Quant Beat Human Intuition
PMS Bazaar recently organized a webinar titled “Quant Investing vs Traditional PMS: Can Quant Beat Human Intuition” which featured Mr. Vivek Sharma, Head of Investment, India, Estee Advisors. This blog covers the important points shared in this insightful webinar.
PMSes Deliver Up to 7.2% Return Amid 3rd Straight Month of Market Decline in Dec-2024
Over 340 strategies outperformed Nifty50 TRI and more than 170 clocked positive returns, showcasing resilience despite challenging market conditions