Have been investing in Axis Bluechip LargeCap Equity Fund (Direct - Growth) for few years. Currently it is ranked around 22 in it’s category. Was looking at Nippon India LargeCap Equity Fund (Direct - Growth), which is ranked #1 in it’s category, and it seems to be out-performing Axis Bluechip by a reasonable margin over past 2-3yrs. Both have similar age, but Axis Bluechip has a AUM that is 2.5x of Nippon India one. Nippon India’s ratios are mostly stronger than Axis ones, indicating better ROI against risk, although Axis Bank has a small amount of Debt to cushion against large downswings. The Nippon one’s expense ratio is 0.95, while that of Axis one is 0.59 – not a huge difference, but with compounding is still something.
Wondering if there are reasons why I shouldn’t ditch Axis Bluechip and switch entirely (or at least the part that has transitioned into LTCG) to Nippon India ? In fact, some of the historical graphs seem to vaguely allude to Axis Bluechip performing better than Nippon, not sure if that is a misreading of the NAV only, but other data seems to indicate otherwise.
You are chasing the performance. Generally never a good idea.
Regardless of how hard you try, after few years, you will again end up in this situation where fund you selected is not Ranked#1 in historical returns chart.
If you choose Nippon today, after couple of years it will be Axis (or ICICI or XYZ) topping the chart and you will be again wondering same thing which you are wondering today.
I would suggest either move to a Nifty 50 index fund OR stop worrying about this ranking game.
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Have you done a comparison study of the portfolio composition between these two funds. I did look at it and it seems that weightage allocated is quite different and the composition of companies are different and obviously the results will be different.
Private sector banks in axix is 22.86% weightage whilst Nippon has 17%.
Do a similar exercise and you will understand why one is performing the way it is.
Both have many similar stocks and diverse as well. This could be a good mix if you have both. Check how many are similar and how many other company you dont have. Then if you like the combination, retain what you have on a as is basis and put incremental money in the one you do not have and see the performance, then you can do mix and match.
My personal views only. No point in closing and moving to other until the other is blatantly underperforming. It is like in immigration counter, there are many ques, you need to choose one, and go and stand, then you feel the other que is moving faster, so you move there only to realise that the one you stood in fact cleared all passengers faster and you still standing in in the que.
Thanks for taking time to respond, and sharing the great link. I’ve only skimmed through the contents of the link and the scenarios explained, and need to give it a more detailed read, but I think I get the gist of the article.
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Thanks, that’s a great analogy. I can certainly keep the mix, but then it seems to run a bit contrary to what seems to have been a much-floated popular-wisdom that no point trying to diversify between MFs in same category.
Agree, it should not be the case, since you said you wish to move from one fund to another, this was suggested as a stop gap arrangement till you get to see how both the fund operate.
Ultimately, everything depends on the corporates and their weightage which are part of the fund Check both the fund portfolio and it would be nice to see how many are common and how many are not. Then you can take a call whether you would like a higher weightage for IT or lower weightage. Ultimately it is your choice.