Mastershares: a bonaza for large investors

Abstract

What is the performance of Mastershares — the first all-equity, closed-end growth fund launched in 1986 by the Unit Trust of India— from the points of view of funds management, large investors and small investors? Samir K Barua and Jayanth R Varma examine this aspect using various portfolio measures suggested in the literature. According to them, from the perspective of funds management, Mastershares has outperformed the market. Its performance from the point of view of large investors holding Mastershares only as part of a diversified portfolio has also been excellent. However, from the point of view of investors who choose Mastershares as the principal vehicle for investment in equity, its performance is mediocre. Since most small investors are likely to be in this category and any mutual fund such as Mastershares ought to serve small investors, its inadequate performance is a matter of concern.