Broad-based profit growth make the case of actively managed funds in 2024

Active largecap funds post improved performance in 2023, mid and smallcaps stumble

Actively managed funds, especially those with greater flexibility to invest in stocks across sectors and market capitalisation — such as multicap and flexicap — can outperform other schemes in 2024 if the prevalent trend in corporate earnings and profit growth sustains, according to analysts.

“Corporate profits are mean-reverting to higher levels. Also, the decade-long trend of profit concentration is reversing. For investors, opportunities of alpha creation go up with relatively undiscovered names garnering larger profit shares,” ASK Private Wealth said in a recent report.
 

In the last one year, flexicap funds have delivered 27 per cent return on an average.