Dalal Street Investment Journal - July 09, 2019

DSIJ.in JULY 8 - 21, 2019 I DALAL STREET INVESTMENT JOURNAL (^71)
MF page - 05
Investing For One Year
Investing for 3-year period
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
160.00%
6/11/200810/11/20082/11/20096/11/200910/11/20092/11/20106/11/201010/11/20102/11/20116/11/201110/11/20112/11/20126/11/201210/11/20122/11/20136/11/201310/11/20132/11/20146/11/201410/11/20142/11/20156/11/201510/11/20152/11/20166/11/201610/11/20162/11/20176/11/201710/11/20172/11/20186/11/2018
Multi Cap Vs Equal Weighted Large Cap, Mid Cap and Small Cap Portfolio Vs Sensex 1-Ye a r
Rolling Returns
Multi Cap Fund Potfolio (LC + MC + SC) Sensex
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
6/11/20089/11/200812/11/20083/11/20096/11/20099/11/200912/11/20093/11/20106/11/20109/11/201012/11/20103/11/20116/11/20119/11/201112/11/20113/11/20126/11/20129/11/201212/11/20123/11/20136/11/20139/11/201312/11/20133/11/20146/11/20149/11/201412/11/20143/11/20156/11/20159/11/201512/11/20153/11/20166/11/2016
Multi Cap Vs Equal Weighted Large Cap, Mid Cap and Small Cap Portfolio Vs Sensex 3-Ye a r
Rolling Returns
Multi Cap Fund Potfolio (LC + MC + SC) Sensex
1-Year Rolling Returns
Mutual Fund Category Underperformed Outperformed# Total
Multi Cap Vs Portfolio 1,640 830 2,470
Multi Cap Vs Sensex 849 1,621 2,470
Underperformed means multi-cap funds have underperformed the portfolio
#Outperformed means multi-cap funds have outperformed the portfolio
In the one-year period, the multi-cap funds have largely underperformed the portfolio, while these funds have outperformed the
Sensex. Of all the observations of 1-year rolling returns in 1,640 out of 2,470 instances, the multi-cap funds have underperformed
the portfolio, whereas only in 830 instances it has turned out to be positive. It is completely opposite in the case of Sensex, with
multi-cap funds beating the Sensex in 1,621 instances, while underperforming in 849 cases.
3-Year Rolling Returns
Mutual Fund Category Underperformed Outperformed Total
Multi-Cap Vs Portfolio 1,416 556 1,972
Multi-Cap Vs Sensex 381 1,591 1,972
The 3-year rolling returns tell the same story as with the 1-year rolling returns. Here too the portfolio was successful in beating the
multi-cap fund with the highest number of negative observations in the case of multi-cap funds. On the other hand, multi-cap
fund was successful in beating the Sensex.
If we look at the 1-year rolling returns of the equally
weighted portfolio and the multi-cap funds, then we
can see that the portfolio performs better than Sensex
and multi-cap funds when the market is rising, while
during downturn, it underperforms most of the
times. One of the reasons for such performance is
that the mid-cap and small-cap funds form two-third
of the portfolio, which move faster than the frontline
indices. Hence, when the markets goes up, these
funds go up faster and when the market goes down,
they drop at faster pace.
To get a deeper understanding, we segregated the
study in terms of number of times multi-cap funds
have outperformed the portfolio or the Sensex.
When it comes to three-year period, we see
the performance gap widening in the 3-year
rolling returns, especially post Oct 2011,
when the mid-cap and small-cap stocks were
a rage and were favourites with the investing
fraternity. This is the reason when the markets
were rising and the portfolio increased at a
good pace and beat the performance of
multi-cap funds and the Sensex. However,
when the markets fell in the last one-and-half
year, the portfolio fell more as compared to
multi-cap funds and Sensex.