Mutual Fund Schemes Invested in Shares of Industry Leaders Have Underperformed

According to Value Research, a top most mutual fund tracking organisation, Mutual Fund schemes that have invested in shares of industry leaders have underperformed in the broad markets. There are four schemes that offer to invest in shares of industry leaders. These schemes have lagged behind in the large cap equity fund category in the 1 year and 3 year time frame.

Many investment experts ask retail investors to invest in leading companies of various sectors. But many mutual fund companies who have put this strategy to practice have not seen any results.

UTI Leadership Fund is the largest fund among these schemes with an AUM (Assets Under Management) of Rs.617 crore as on March 31, 2012. The other funds that follow this strategy of investing in industry leaders are, Daiwa Industry Leaders Fund (-5.52%), Religare Business Leaders Fund (-6.7%) and Sundaram India Leadership Fund (-8.37%). The numbers in brackets indicates 1 year returns of respective scheme.

Thus, prolonged under-performance of these schemes made things worse for the investment strategy of investing in industry leaders.

Comments are closed.