With the markets falling 2.32% over the last four sessions, certain investors may feel concerned about their investment in funds in the mid and small-cap segment.
According to Amit Kukreja, founder of AmitKukreja.com, this is not the right time to exit the mid-cap funds, as there were several factors that resulted in the underperformance of many of them.
“There are many reasons, which have triggered the underperformance of the mid-cap funds with respect to the index, but that doesn’t mean it ends at all here. There are many other opportunities, which have come early and there is also a horizon that needs to be kept in mind. If we have to conclude that this is (the) time to exit (an) actively managed mid-cap fund, then that is not the case. One year is too short a frame to judge it,” Kukreja told NDTV Profit.
According to him, the PSU rally and major allocation towards large caps are a few of the reasons for the underperformance.
While there have been several underperforming funds, Motilal Oswal’s mid-cap fund managed by Niket Shah was an exception. Identification of the right stocks with high growth, no compromising in quality and buying at the right valuation were few of the reasons for the fund’s success, said the fund manager at Motilal Oswal AMC.
Shah further said that it is important to identify the right theme ahead of the cycle and have a three to five-year view. While the market may not appreciate or resonate with the theme, it would pick up eventually, he said.
