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.

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.