Long-only alternative investment funds (AIF) have outperformed long-short funds in the month of June. The former gave average category returns of 5.2%, compared with 2.19% for the latter, data from PMS Bazaar for Category 3 AIFs showed.
Of the 56 long-only funds, all except six managed to beat the Nifty50 returns of 3.5% during the month, while only six out of the 20 long-short funds beat the benchmark.
For the one-year period, Aequitas Equity Scheme I was the best performer with returns of 64.3%. ICICI Prudential Growth Leaders Fund and Nippon India’s Big Switch Scheme I were the other two top performers for the one-year period, with gains of 41.4% and 39.6%, respectively.
Among long-short funds, Avendus Capital’s Enhanced Return Fund – 2 was the topper in June with returns of 6.4%. The scheme has topped the charts for the one-year period also with returns of 33.5%. This is followed by Whitespace Alpha’s Whitespace Fund 1 – Equity Plus with gains of 31.2%.
Indian equity markets continued their positive momentum in June amid improving domestic macros, US debt ceiling extension and strong inflows from foreign institutional investors. The broader markets – S&P BSE Midcap and S&P BSE 250 SmallCap – also maintained their positive momentum and were up by 6.2% and 6.4%, respectively.
Market observers believe that the global interest rate increase cycle is more or less done, and a rate cut may be in the offing in the early part of the next calendar year.
“June was another strong month for equity markets globally, as investor sentiments remained buoyant. Amid a clear risk-on, almost all the markets in the world did well,” said Sunil Singhania, founder, Abakkus Asset Manager. “Interest in investing in India appears very strong from both businesses as well as portfolio allocators. Thus, markets look like being in a sweet spot both fundamentally as well as from strong investor interest. From an immediate near-term perspective, corporate results for the June quarter will set the tone for further movement in the market.”
A long-only fund takes only long positions. A long-short fund takes both long and short positions in the market and use several alternative investing techniques such as leverage, derivatives and short positions to purchase relatively undervalued securities and sell overvalued ones.