Those who don’t know about Religare AGILE fund, let me explain you first that What is AGILE Fund. Well, AGILE Fund means “Alpha Generated From Industry Leaders” Fund.
It means that it is a Quant based fund means here the fund manager has not any role. All the portfolio is made by computer based software & private algorithm of the fund house which is not publically available. In case of AGILE Fund, it is bound to invest 11% of its total corpus in 11 Stocks only. In short, the AGILE fund’s portfolio is concentrated 11 stocks portfolio only.
During the time of launching, AGILE was claiming that it can beat the market very well. And by this marketing strategy, it had collected Rs.130 crore from the Investors.
But let me tell you that, The AGILE Fund is a Complete disaster. How? Well, read further.
The S&P CNX Nifty has given whooping 28% return in May 2009, the best monthly gain in past 17 years. While Religare AGILE rose to just 8.5%.
What has gone wrong with this quant fund, whose net asset value is still at a 49% discount to its offer price of Rs.10 in a market that has zoomed 55% since the beginning of the year?
The Reason is its Mathematical Model. According to the book, The Intelligent Investor by Benjamin Graham, these types of Mathematical models don’t work in the market.
Valueresearchonline CEO Dhirendra Kumar said, “For an emerging market like India, a thoughtful fund manager still has a meaningful role to play and it is still early days for any fund to come up with a model that runs on an autopilot.”
So if you have invested in this fund by attracting its lucrative NFO Marketing than i think this is the time to book a loss. Sorry not to book a loss but actually this is a time to limit a loss. Remember, the actively managed fund will always have an edge over these types of autopilot funds.
Moral: Invest in Equity Diversified actively managed mutual fund having a past record of 3-5 years at least.
After all Vanilla is the Best…!!!
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