Why Sohum Asset CIO Sanjay Parekh Is Betting On Large-Cap Funds
While Parekh favours large-cap funds, he said there is potential for generating returns from mid and small-cap funds as well.
There is scope for generating returns in large-cap funds, according to Sanjay Parekh of Sohum Asset Managers Pvt.
"The average holding of large-cap funds in the last 19 months has been 78%, which has further risen to 82%," Parekh, founder and chief information officer at Sohum Asset Managers, told Niraj Shah on The Portfolio Manager show.
The one-year Nifty 50 return is around 17-18%, while the average of the top 10 companies has been over 65%. "Our endeavour is to get 18-20 stocks from the Nifty 50,” he said.
Parekh said that in case of small and mid caps, the divergence between price and value should be larger so that they can get a reasonable amount of return.
“Currently, in this environment, both mid and small caps have done exceptionally well and have almost given twice (the returns) of large caps. So, we have got alpha from large-cap and from mid and small caps as well,” he said.
Parekh said the Rs 4.5 billion that he managed till date was majorly through large-cap funds. His portfolio included 70% large caps, while the remaining 30% have been small and mid caps, so as to "create all the alpha that you can", he said.
“In the past two years, mid and small-cap funds have done exceptionally well. If you take a 10-year view and if your product positioning is right, then there is enough money waiting for large-cap funds,” Parekh said.
According to him, active fund management is possible under large-cap funds and he highlighted that his company has delivered 16% returns over Nifty Total Returns in the past 19 months.
Watch the full interview here:
