Should you invest in this scheme that’s quietly topping the charts?
A sleeping fund house has finally woken up and is quickly making inroads in the flexi cap category.
JM Mutual Fund is one of the earliest companies in India to secure a private mutual fund licence, in 1994, but had failed to make its presence felt until 2021. Even after operating for nearly three decades, it was managing only about ₹2,602 crore of assets, as of January 2021. In the 3.5 years since, though, its assets under management have skyrocketed to more than ₹7,500 crore.
What has caught investors’ attention is JM’s flexi cap fund, which was launched in September 2008. It hadn’t made a mark until JM Mutual Fund roped in Satish Ramanathan as chief investment officer in August 2021. At the time, the JM Flexicap was handling about ₹187 crore in assets under management. The latest available figure for May shows its assets under management (AUM) was just shy of the ₹2,500-crore mark.
The JM Flexicap fund has generated 64% returns in the past 12 months. It is currently the best-performing fund in the category after Quant Mutual Fund in terms of returns over the past five years, according to Morningstar data.
It has registered an average return of 26% over five years, and 15.85% since inception. But does this mean investors should start investing in the JM Flexi cap fund?
To understand why the scheme has outperformed in recent years, we need to dig deeper and find out the stock bets that worked in its favour. Underlying portfolio data trends reveal the true picture.
A large part of the alpha stems from increasing allocation to small- and mid-cap stocks since the beginning of 2022. JM Flexicap’s exposure to small- and mid-caps has increased from 6.7% and 18% of its overall portfolio, respectively, in January 2022 to 39.7%
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