Difficult Time For Fund Managers
Business Today|July 30, 2017

With stock markets at a record high, fund managers are having a difficult time finding value stocks to deploy the record inflows.

Mahesh Nayak
Difficult Time For Fund Managers

Three years ago, 40 per cent of HDFC Mutual Fund’s equity portfolio was underperforming its benchmark. The fund house had booked profits in many FMCG and pharmaceutical stocks as its fund managers – led by Chief Investment Officer (CIO) Prashant Jain – felt these sectors were overvalued. Instead, they bet on stocks focused on infrastructure. The call initially seemed a mistake as infrastructure-related stocks remained sluggish, while FMCG and pharmaceutical sectors continued to rally. HDFC Mutual Fund suffered, losing its No. 1 position among equity funds.

“We did temporarily lose out by taking that call,” says a senior official at the fund on condition of anonymity. But there was no panic reversal of strategy. HDFC Mutual Fund stuck to its guns, continuing with the spread it had banked on. In time, it paid off. A year ago, FMCG stocks, after a spectacular rise, began to taper off, just as the fund managers had suspected, while pharmaceutical stocks were hit by the US Food and Drug Administration actions related to quality and pricing issues. Some pharmaceutical stocks have fallen 50 per cent in the past one year. Indeed, 100 per cent of HDFC Mutual Fund’s equity funds have beaten their benchmark in the last one year, and 97.5 per cent for a period of three years and five years. “We did not hesitate to book profits when valuations crossed our expectations,” says another HDFC insider, who does not want to be named. “We did not get euphoric when FMCG or pharmaceutical stocks began shooting up.”

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM BUSINESS TODAYView all
"Moving to cloud helped us grow❞
Business Today India

"Moving to cloud helped us grow❞

What was the problem you were grappling with?

time-read
1 min  |
November 24, 2024
She's Got Time
Business Today India

She's Got Time

MORE WOMEN ARE BECOMING WATCH CONNOISSEURS, SEEKING OUT BOTH JEWELLED AND TECHNICAL WATCHES FOR THEIR STYLE AND CRAFTSMANSHIP

time-read
3 mins  |
November 24, 2024
RISING STAR
Business Today India

RISING STAR

PARUL GULATI IS a name that's been steadily gaining prominence in the Indian entertainment industry after she appeared on season 2 of Shark Tank in 2023. She has become a multifaceted personality who effortlessly transitions between acting and entrepreneurship.

time-read
1 min  |
November 24, 2024
Building on a Legacy
Business Today India

Building on a Legacy

WHEN ZAHABIYA KHORAKIWALA stepped into her role as Managing Director of Wockhardt Hospitals over a decade ago, she confronted formidable challenges that have since turned into achievements.

time-read
1 min  |
November 24, 2024
LEADER IN INNOVATION
Business Today India

LEADER IN INNOVATION

AS FEDEX'S PRESIDENT (Middle East, Indian subcontinent and Africa), Kami Viswanathan has a lot on her plate.

time-read
1 min  |
November 24, 2024
WAITING IN THE WINGS
Business Today India

WAITING IN THE WINGS

Here are those who missed out as they have not yet completed a year in office; they'll be strong contenders in 2025

time-read
1 min  |
November 24, 2024
A DECENT PROPOSAL
Business Today India

A DECENT PROPOSAL

IN TODAY'S WORLD OF TRYING TO CREATE AN EQUITABLE SPACE, BOTH MEN AND WOMEN CONTRIBUTE TO THEIR HOUSEHOLDS. WOMEN ARE ENCOURAGED TO HAVE THEIR OWN SAVINGS POOL AND INVESTMENT ROUTINE. GIVEN THIS, HOW SHOULD FUTURE BRIDES APPROACH FINANCIAL PLANNING?

time-read
5 mins  |
November 24, 2024
Women and the STEM Bias
Business Today India

Women and the STEM Bias

EMPOWERING WOMEN IN STEM WILL NOT ONLY BENEFIT INDIVIDUALS, BUT ALSO STRENGTHEN THE ENTIRE INDUSTRY, DRIVING INNOVATION AND PROGRESS.

time-read
3 mins  |
November 24, 2024
ROCKET WOMEN
Business Today India

ROCKET WOMEN

WOMEN IN INDIA ARE NOT ONLY VENTURING INTO SPACE BUT ARE ALSO STARTING TO SPEARHEAD THE COUNTRY'S EFFORTS IN THE GLOBAL SPACE RACE.

time-read
6 mins  |
November 24, 2024
ONE STEP FORWARD
Business Today India

ONE STEP FORWARD

THE NUMBER OF WOMEN INDEPENDENT DIRECTORS IS GROWING STEADILY, BUT IT'S A LONG WAY FROM GENDER PARITY. MUCH MORE NEEDS TO BE DONE TO BREAK THE GLASS CEILING IN BOARDROOMS.

time-read
6 mins  |
November 24, 2024