'If gold's recent surge has increased its allocation beyond 15 per cent in your portfolio, now may be a good time to rebalance.'
Fund managers of large-cap and equity-linked saving schemes (ELSS) have demonstrated a marked improvement in their performance over the past year, according to the latest SPIVA (S&P Indices Versus Active) report released by S&P Dow Jones Indices. In the one-year period ending June 2023, 17 per cent of active large-cap schemes outperformed the S&P BSE 100, compared to just 9 per cent at the end of June 2022. In the case of ELSS, there was a sharp improvement in performance, with 66 per cent of active schemes delivering better returns than the benchmark S&P BSE 200.
Following the sharp run in markets, valuations across the board have become elevated. The National Stock Exchange Nifty50 Index now trades at a 12-month trailing price-to-earnings (P/E) multiple of 24.3 times, 18 per cent higher than this year's low of 20.5 times. The valuation expansion in the broader markets has been sharper.
Actively-managed large-cap mutual fund (MF) schemes have managed to regain some lost sheen this year after faring poorly in the 2022 calendar year (CY22). At the end of the first six months (H1) of CY23, 78 per cent of the active large-cap schemes were ahead of the Nifty50 index funds as against just 26 per cent in 2022. When compared to the Sensex index funds, 61 per cent active funds have delivered better returns, shows an analysis of Value Research data.
Rebalance your portfolio in case it has become overweight on equities vis-a-vis your strategic asset allocation.
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