The three months ending September 2024 witnessed significant shifts in the performance of Portfolio Management Services (PMS), with certain strategies outperforming broader market indices.

Over 400 PMS offerings were tracked (within the PMS Bazaar universe) during this period between July and September 2024, providing a clear picture of how professional asset managers navigated a volatile market landscape. While nearly all of the schemes delivered positive returns, about half delivered alpha.

Amidst fluctuating macroeconomic conditions, the equity benchmarks Nifty50 TRI and BSE500 TRI delivered 7.81% and 7.65% returns, respectively. Many PMS categories showcased resilience, with standout performers in the Sector & Thematic and Small & Mid Cap categories leading the charge. These categories not only delivered strong returns but also outpaced broader market benchmarks, reflecting the agility and expertise of PMS managers in capturing market opportunities.

This report dives into the 3-month performance of various PMS categories, providing insights into the best-performing strategies and highlighting key trends that shaped the market during this period.

PMS Overview

The 3-month period ending September 2024 saw diverse performances across PMS offerings, driven by shifting macroeconomic conditions and sector-specific trends. 

Out of 406 offerings, more than 400 delivered positive returns.  With the equity benchmarks Nifty50 TRI and BSE500 TRI registering returns of over 7.5% each during the 3-month period, this set a challenging backdrop for many PMS managers as about 50% of total offerings beat markets.

Several PMS strategies demonstrated their ability to generate alpha, with a number of categories outperforming these benchmarks. Notably, the Sector & Thematic category, buoyed by strategic bets in high-performing sectors like technology and healthcare, delivered an average return of about 10%, significantly outpacing the broader market indices. 

Similarly, the Small & Mid Cap category (also up 10%) remained a strong performer, benefitting from a resurgence in mid-cap stocks that saw some of the highest returns during this period. Small Cap and Flexi Cap categories posted over 8% average returns each.

Top 10 Performing PMS Strategies for the 3-month ending Sep 2024

The 3-month ending September 2024 saw a variety of PMS strategies delivering standout performances, with some emerging as clear leaders across different categories. These top 10 PMS offerings consistently outperformed their peers and benchmarks, benefiting from strategic sector allocation, active stock picking, and timely market positioning.

The top-performing PMS strategy during this period, Tresor SKG India Value by Pace Financial, capitalised on multi-asset investments, achieving a return of 32.97% versus a benchmark return of about 5%. This was the lone multi-asset strategy in the top 10! 

Other notable performers include Wallfort's Ameya Fund and Money Grow’s Small Midcap, both of which leveraged opportunities in the small & mid-cap space, driving returns to 29.4% and 26.83% respectively during the 3-months.

The top-performing strategies reflect diverse approaches, from sector-focussed thematic strategies to small & mid-cap tilts, to multi-asset portfolios, demonstrating the varied ways PMS managers can extract value from market conditions.

Below is a list of the top 10 PMS strategies based on their 3-month returns:

Category-wise Performance Breakdown 

The three months ending September 2024 saw a range of performances across various PMS categories, with some strategies clearly outperforming others. Below is a detailed breakdown of each major PMS category, listed in descending order of returns.

Sector & Thematic

The Sector & Thematic category emerged as the top performer in the 3-months ending Sep 2024, delivering an average return of about 10%, driven largely by strategic allocations to sectors like technology, healthcare, and consumer staples. We tracked 21 offerings in this basket.

PMS offerings in this category that focussed on specific themes or sectors were able to capitalise on strong performances in these areas. For instance, InCred’s Healthcare Portfolio generated a return of 24.87%, while Valcreate’s IME Digital Disruption achieved 23.30%, benefiting from sector-specific trends. Kotak Mahindra AMC’s Pharma and Healthcare strategy was third, with a 17.11% return for the 3-months.

Below is the list of top-5 performers:

Small & Mid Cap

The 41-player Small & Mid Cap category continued its strong performance, with an average return of over 10%. This category benefitted from renewed investor interest in mid-cap stocks, which showed resilience and strong growth prospects. 

Wallfort’s Ameya Fund led the pack with a return of 29.40%, followed closely by Money Grow’s Small Midcap at 26.83% and Wallfort’s Diversified Fund at 26.19%.

Below is the list of top-5 performers:

Flexicap

Flexicap strategies, which allow for flexible allocations across market caps, also performed well with category average return being at 8.05%. This category has 55 schemes tracked by PMSBazaar. 

Emkay’s Golden Decade of Growth led the Flexicap category with a return of 22.20%, driven by a balanced approach across large, mid, and small-cap stocks. It was followed by Wryght Research’s Alpha Fund and Factor Fund – Hedged; both notched up double-digit returns this quarter. All the top 3 offerings are relatively new.

Below is the list of top-4 performers:

Large Cap

The 24-player strong Large Cap category delivered an average return of 7.63% during the September 2024 quarter. Large-cap PMS strategies, typically investing in well-established, blue-chip companies, benefitted from stability amidst market volatility. 

Despite facing headwinds from global macroeconomic factors, large-cap stocks held their ground, providing steady returns. Notable performers in this category include Standard Chartered Securities’ Long Term Value Compounder, Ambit’s Coffee Can and Alchemy’s Alpha 100.

Below is the list of top-5 performers:

Multi Cap

Multi Cap strategies, which allow for flexible allocations across large, mid, and small-cap stocks, posted an average return of 7.61%. This category boasts of the highest number of PMS offerings at a whopping 175, accounting for more 40% of PMS universe tracked. 

The flexibility of this category helped PMS managers capture gains across various market segments, especially in mid-caps, which saw notable momentum during the quarter. The top performers in this category include Stallion Asset’s Core Fund, Svobodha Infinity's AD-ASTRA, and Motilal Oswal AMC's India Growth Strategy.

Below is the list of top-5 performers:

Mid Cap

The 18-scheme strong Mid Cap category delivered solid returns of 7.49% on average, as mid-cap stocks continued to benefit from growth prospects and favourable valuations. 

Many PMS strategies in this category took advantage of opportunities in high-growth mid-cap companies. The top performers in this category include Right Horizons' Super Value, Nuvama's Equities eXpansion Target, and Renaissance Investment Managers' Midcap Portfolio.

Below is the list of top-5 performers:

Conclusion

Overall, the PMS market showcased resilience, with multiple categories delivering solid returns and outperforming traditional benchmarks despite the broader market volatility. On the macroeconomic front, factors such as rising interest rates and concerns over inflation influenced both equity and debt markets. While these trends could have created headwinds for some large-cap PMS strategies, they also provided opportunities for sector-specific and mid-cap-focused strategies to thrive.