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Smaller fund managers beating bigger peers hands down in a tough market

Money managers overseeing smaller assets are proving to be m..

Money managers overseeing smaller assets are proving to be more successful on Dalal Street than their peers managing large corpuses.

Select fund managers with assets under management (AUM) of less than Rs 10,000 crore have outpaced their peers with bigger assets by a wide gap in last 12 months. This happened despite feeble sentiment in the domestic equity market in the recent past amid subdued macroeconomic trends, sustained FII outflow, a falling rupee and rising crude oil prices.

Kunal Sangoi, a fund manager for Aditya Birla SL India Opportunities Fund and Aditya Birla SL Digital India Fund, has managed to deliver an average return of 35 per cent in last one year and 16.38 per cent over past six months. The comparative figures for the BSE Sensex stood at 13 per cent and 4.65 per cent, respectively.

Ajay Khandelwal, a fund manager from BOI AXA Mutual Fund, comes next. He looks after BOI AXA Mid & Small Cap Equity & Debt Fund that delivered nearly 23 per cent, 9 per cent and 3.5 per cent returns over one year, six months and one-month tenures, respectively.

His portfolio comprised midcaps and smallcap equity and equity-related securities as well as fixed income securities. As per last available data, the fund had multibagger stocks like Dilip Buildon, HEG, Graphite India, Sterlite Technologies and Bhansali Engineering in its portfolio.

Schemes managed by Dhrumil Shah of Reliance Mutual Fund, Ankit Jain of Mirae Asset Mutual Fund and Pradeep Gokhale of Tata Mutual Fund delivered an average return of over 20 per cent in last one year.

Reliance Mutual Funds Shah looks after Reliance Capital Builder Fund-IV-D, Reliance Small Cap Fund and Reliance Capital Builder Fund-IV-C, comprising a total AUM of nearly Rs 7,500 crore. Jain manages Mirae Asset Great Consumer Fund, while Gokhale handles Tata Hybrid Equity Fund, Tata Ethical Fund, Tata Banking & Financial Services Fund and Tata Digital India Fund.

The Tata Digital India Fund has rallied 48 per cent in last 12 months.

Other fund managers who managed to deliver over 15 per cent return in last one year included Ashiwin Jain (ICICI Pru), Daylynn Pinto (IDFC MF), Swapnil P Mayekar (Motilal Oswal AMC), Shreyash Devalkar (Axis MF), Saurabh Pant (SBI MF), R Srinivasan (SBI MF), Anup Upadhyay (SBI MF), Varun Sharma (Franklin), Jinesh Gopani (Axis MF).

Mayekar managed a total AUM of over Rs 13,000 crore, whereas Gopani oversaw a corpus of Rs 22,000 crore.

Funds managed by Raunak Onkar, Rajeev Thakkar and Raj Mehta of PPFAS Mutual Fund, Varun Sharma of Franklin Templeton Mutual Fund, Samir Rachh of Reliance Mutual Fund, Alok Singh of BOI Axa Mutual Fund, Rohit Seksaria of Sundaram Mutual Fund, Chanchal Khandelwal of Birla Sun Life Mutual Fund, Dhimant Kothari of Invesco Mutual Fund, Hiten Shah of Edelweiss Mutual Fund, Nidhi Chawla of SBI MF and Taher Badshah of Invesco Mutual Fund also delivered over 15 per cent return to investors in last 12 months.

“We have different strategies for each of our product. For instance, contra is a value mandate in which we invest in quality stocks, which are available at cheaper valuation. We prefer firms that are in a turnaround phase or have value-oriented businesses,” Taher Badshah, Chief Investment Officer of Invesco Mutual Fund, told

Dynamic category schemes are asset allocation funds. “We do allocation between cash and equities depending on market conditions. Cash component is around 25 per cent in last one year in dynamic fund. Dynamic is basically more focused on growth stocks. Stock selection is done through a bottom-up approach in the dynamic category,” he said.

Badshah said in the growth opportunities fund, the team maintained a balanced approach between growth and value stocks as well as midcaps and largecaps and in terms of sectoral exposure.

“For midcap and multicap funds, liquidity is a major challenge after the recent correction and it is not easy to churn portfolio. We are not sitting on any significant cash in midcap and multicap fund,” he said.

Parag Parikh Long Term Equity Fund has delivered 1.34 per cent, 3 per cent and 17 per cent returns for past 1 month, three months and one year, respectively – impressive in an environment where the broader market is facing a lot of headwinds. The scheme delivered 12.33 per cent and 19 per cent annualised returns over 3 years and 5 years, respectively.

“We go for bottom-up stock picking,” said Raj Mehta, Fund Manager, PPFAS Mutual Fund. “We are looking at companies on an individual basis. We are holding about 23-24 per cent cash position in our portfolio, which helped us in the recent mid-cap correction. Another thing that has helped us is geographical diversification. Foreign stocks have done well for us compared with Indian markets over the past one year and that has added to the returns,” he said.

Among the big cats, handling large assets, ICICI Prus

Sankaran Naren, who handles total AUM of nearly Rs 1 lakh crore, has delivered an average of 11 per cent return in last one year. His funds on an average have given an annualised return of 10 per cent and 18 per cent, respectively, over three-year and five-year horizons, respectively.

Funds managed by HDFC Mutual Funds star money manager Prashant Jain generated 5 per cent average return in last one year. His funds HDFC Equity Fund, HDFC Hybrid Debt Fund, HDFC Prudence Fund and HDFC Top 100 have delivered 9.55 per cent and 14.28 per cent annualised returns over three-year and five-year horizons, respectively.

Schemes managed by Birla Sun Lifes Mahesh Patil have delivered an average return of 8.30 per cent in last one year. His funds returned between 4 per cent and 15 per cent in last four quarters, whereas all of his funds dipped between 0.70-12 per cent in last six months.

ICICI Prudentials Priyanka Khandelwal manages some Rs 40,000 crore assets across 45 schemes. She delivered an average of 9.55 per cent return in last one year. On an average, her funds delivered negligible returns in last six months.

Funds managed by Harsha Upadhyaya of Kotak Mutual Fund have slipped over 2 per cent in last six months.

“Markets are trading at a valuation, which is much higher than where they were trading historically. To that extent, either time wise correction or value wise correction could happen. We think at least in largecaps, it would be more of a time-wise correction. It has already happened for last two-three quarters and could continue for some more quarters,” he told ETNow in an interaction.

Funds managed by Upadhyaya on an average delivered 11.72 per cent and 18 per cent annually in last three years and five years, respectively, and advanced 6.7 per cent in last one year.

“Midcap and smallcap funds where you do not get the comfort of earnings growth can really correct sharply where valuations are high,” he said in the interview.

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