In February, the majority of long-only alternative investment funds (AIFs) underperformed the Nifty, with 65 out of 80 funds reporting negative returns. The average category return for these funds was -8.7 per cent, compared to the benchmark Nifty’s return of -5.8 per cent, as per data from PMS Bazaar for category III AIFs.
Among the 80 funds, all of them registered negative returns. However, Aequitas Investment Consultancy’s Equity Scheme I, Prajana Advisors’ Athena Enhanced Equity Fund, and I Wealth Management’s I Wealth Fund were among the least affected, with returns ranging from -0.9 per cent to -3.1 per cent.
On the other hand, long-short funds had a less severe impact, with an average category return of -3.1 per cent. Altacura AI’s AI Absolute Return Fund emerged as 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). It is noteworthy that 26 out of the 33 long-short funds outperformed the Nifty.
Looking at the one-year performance, A9 Finsight’s Finavenue Growth Fund stood out as 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 also among the top performers, with gains of 35.5 per cent and 19.7 per cent, respectively. All three of these funds are long-only.
A long-short fund engages in both long and short positions in the market, employing various alternative investing techniques such as leverage, derivatives, and short positions to capitalize on undervalued securities and sell overvalued ones.
In February, foreign portfolio investors withdrew nearly ₹59,000 crore from the cash market. However, the market seems to be showing signs of a turnaround after a turbulent period. Positive global cues, FPI buying, earnings growth trajectory, and developments related to Trump tariffs are expected to influence market movements going forward.
