Look At Long-Term Returns, Risks, Experts Say

Anand Dalmia: So, which is probably one of the most recommended categories these days just given the flexibility and as the name suggests, you can invest any amount of percentages in any of the categories, which is mid, large or small.

Historically as you know, a lot of the current flexi-caps are the funds which were historically multi caps. So, when the new regulation came around saying that every segment, large, mid and small to have 25% minimum and some of the larger funds, they took the mandate of flexi-cap and converted or rechristened their existing, multi-caps to flexi-caps.

HDFC is actually one of those, which was historically a multi cap, now a flexi cap. And if you look at 2022, the reason why probably they did well, for many, many years Prashant Jain kept on talking about his PSU bets, so in between you know, there were two years when everyone said HCFC fund has finally stopped coming because he could see the value in PSU companies, and then 2021 and 2022, once the PSU cycle started turning around, 2022 was a great year for PSUs, that’s probably one of the reasons why the fund performed so well in 2022. Thanks to PSUs.

However, you know the ones that are historically multi-caps and now become flexi caps, we are seeing the problem that Salonee highlighted that 80%, like HDFC has 80% in large cap. Now I want a flexi-cap but 80% of it is still again in large-caps and one of the reasons is, if you have a fund which is Rs 30,000 crore plus and you want to invest in stocks, then you have to have a large exposure to large-caps otherwise how many stocks do you have in your portfolio. So, I think the larger-ones are the ones which will find it difficult to create a lot of alpha.

Sometimes you can go right on your sectors, but if you have a Rs 30-40-50,000 crores flexi-cap fund just like the Kotak or HDFC, for you to get alpha will not be that easy because you need to have an orientation towards the large-caps, whether it is 60%, 70% or 80%, it has to be there.

Now what are our recommendations, I…

Read complete post here:
Source link

Tags :