Sixty five of the 80 long-only alternative investment funds (AIFs) underperformed the Nifty in February. These funds reported an average category return of -8.7 per cent, compared with the benchmark’s return of -5.8 per cent, according to data from PMS Bazaar for category III AIFs.
All 80 funds gave negative returns, with Aequitas Investment Consultancy’s Equity Scheme I, Prajana Advisors’ Athena Enhanced Equity Fund and I Wealth Management’s I Wealth Fund being the least affected. These three funds returned between -0.9 per cent and -3.1 per cent.
Long-short funds, on the other hand, were less impacted, with average category returns at -3.1 per cent. Altacura AI’s AI Absolute Return Fund was the top performer with returns of 1 per cent, followed by Neo Asset Management’s Treasury Plus Fund (0.8 per cent) and Dolat Capital Market’s Absolute Return (0.5 per cent). Notably, 26 out of the 33 long-short funds outperformed the benchmark Nifty.
For the one-year period, A9 Finsight’s Finavenue Growth Fund was the top performer with returns of 48.5 per cent. Negen Undiscovered Value Fund and 360 ONE Asset Management’s High Growth Companies Fund were the other two top performers, with gains of 35.5 per cent and 19.7 per cent, respectively. All three are long-only funds.
A long-short fund takes both long and short positions in the market and uses several alternative investing techniques such as leverage, derivatives, and short positions to purchase relatively undervalued securities and sell overvalued ones.
Foreign portfolio investors pulled out nearly ₹59,000 crore from the cash market in February. After a turbulent five months starting October last year the market finally seems to be turning a corner. The past week saw a strong run-up in Indian equities on positive global cues and some FPI buying. The earnings growth trajectory, foreign flows and announcement on Trump tariffs will dictate market movement going forward.