Thread by @niteen_india

Here is the summary of 10 Mutual Funds from the large-cap sector based on their AUMs.

Size (XXXL and expanding...)
Total AUM: 1,35,217Crs (AUM: Asset Under Management, size of the funds)
Top 25 stocks: Ranging from 70-90% holding
1/n

Returns (better not to talk)
against S&P BSE 100

1 yr: 8 underperformed, 2 could barely outperform. 1 had a negative return.
3 yr: Again only 2 could outperform. Rest were handsomely beaten down by the Index.
5 yr: Again only 2 could outperform.
7 yr: 7 could outperform
2/n

Here is the real fun:
I was trying to understand the reasons, what has happened during the last 5 years that caused this underperformance? Mind it we are looking for relative performance against index so things like economy did not perform will not cut the ice

3/n

These are some of the reasons that I could gather (please add if you have any additional one)
- The AUM of the MFs grown by 23.45% (from 2014-2019) vs 17.4% (2000-2019)
- The AUM has gone up from 8.3Trillion to 23.8Trillion
4/n

- Funds flushed with money but opportunities did not to meet their ever-growing size
- Since 2014, 120 companies took 1.60Lac Crs in mainline IPOs. Some of these did not survive. Some of these were fully valued. Some became multi-bagger.
5/n

- In short, the funds were chasing the same set of companies with their AUMs growing at a pace higher than the historical average
- were they looking for the same set of companies (see list of holdings below)?
6/n

If you do what everyone is doing, you get what everyone gets

If 10 funds were just one, what would be top 25 holdings? Here it is. 65% of total AUM. (as of Jul'20)

HDFC Bank
Infosys
Reliance Ind
ICICI Bank
Bharti Airtel
ITC
Axis Bank
Kotak Mahindra
L&T
HDFC

Disc.: no recos
7/n

State Bank of India
Hindustan Unilever
HCL Technologies
NTPC
Tata Consultancy Services
Divi's Laboratories
Maruti Suzuki India
Cipla
Bajaj Finance
BPCL
Ultratech Cement
HDFC Life Insurance
Nestle India
Avenue Supermarts
HPCL

Disc.: no recos
8/n

Consensus kills?
Common holdings across funds

All 10 funds: Infosys, ICICI Bank, Bharti Airtel, HDFC Bank
9 funds Reliance Ind, L&T
8 funds: Axis Bank
7 funds: HDFC, NTPC, Kotak Mahindra, HCL Tech
6 funds: Maruti Suzuki, Cipla, ITC, SBI, Ultratech, HUL

Disc.: no recos
9/n

Wish to still say, hmm?
#MutualFundSahiHai
#MutualFundInvesting is for the Long term
#MutualfundInvestments are subject to market risks (I wish to add the size of the market too)

Data source:
MFs: @ValueResearch
IPO data: chittorgarh.com
MF AUM: CAMS RHP IPO
10/n