In February several category 3 long-only Alternative Investment Funds (AIFs) managed to make significant gains while the markets saw reasonable but modest gains, with standard benchmark indices moving up. The month saw the Nifty rally by 1.32%, while the broader market BSE 500 gained 1.66%.
The top 10 funds in the category managed to give 2-5 percentage points more than the Nifty and about 1.5-4.5 percentage points more than the BSE 500 TRI during the month.
Category 3 long-only funds invest in companies that are listed and traded with reasonable volumes in the BSE and NSE. They do not have any confining mandates and are thus unrestricted in the choice of their strategies based on the fund manager's perception of the market conditions and investor requirements.
During the month, 28 category III long-only funds managed to outperform the Nifty 50 TRI, while 27 strategies delivered better returns than the BSE 500 TRI.
The long-short category’s performance was a bit circumspect. We had 9 such funds delivering more than the Nifty 50 TRI. Against the BSE 500 TRI, the overall performance was lukewarm.
Long-only funds gave 1.04% on average in February. The long-short funds ended the month with 1.23% returns on average.
Closed-ended funds did very well in the long-only category with eight of the top 10 being such schemes. However, open-ended strategies continued to dominate the toppers’ chart in the long-short category during the month.
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