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JM Equity

JM Equity (Dividend) is a diversified equity fund launched in December 1994. The fund offers two opt

JM Equity (Dividend) is a diversified equity fund launched in December 1994. The fund offers two options - dividend and growth, and the former has consistently outperformed the latter. Entry in to the plan is at a load of 1.5 % while the fund charges an exit load of 0.75 % for redemptions with in 60 days. The dividend plan has seen consistent payouts with the latest one being the highest at 30 % in February 2000. JM Equity has posted a return of 10.5 % since launch. While the fund has outperformed the BSE Sensex, which gained 2.2 % over the same period, it has remained a below average performer. While the dividend options started off with a diversified equity component with large cap stocks and few IPOs, it took the fund about the middle of 1998 to start fully allocating towards the equity instruments. It was due to its predominantly debt allocation that it was able to guard its assets in a falling markets. Since 1999 however, the fund took to the growth stocks of Software, Pharma and FMCG. However, with the markets soaring with the ICE rally, the fund stood over exposed to ICE stocks. Even today, ICE stocks account for 60 % of the corpus, with the balance spread across FMCG, Pharma and Cyclicals. While this strategy helped the fund gain 94 % in calender 1999, the fund has lost more than the sector average of 13.5 % in 2000. JM Equity is a clear case of missed opportunity, with the fund underperforming even the balanced and debt fund from its family.