In the month of October, PMS strategies put up a fairly healthy and demonstrated their resilience amidst turbulent markets. The rising treasury yields in the US and even in India played spoilsport with indices ending in the red for the month.

In October, the 345 PMS strategies tracked by PMS Bazaar managed to give a -1.94% return on average. The bluechip index and benchmark Nifty recorded -2.74% return in the month, while the broader market BSE 500 TRI managed only -2.86% in October.

The month saw FIIs press the sell button once again as they sold to the tune of Rs 29,056 crore in the equity cash markets. DIIs restored balance by buying in the markets to the extent of Rs 25,106 crore.

As many as 224 PMS strategies (nearly two in three) delivered more than the Nifty TRI in October. The figure was even better when compared to the BSE 500 TRI as 241 schemes (nearly seven in 10) outperformed the benchmark in October. 

The top performers’ chart consisted of a mix of strategies during the month, though small-caps and midcaps had a better run.

Top 10 PMS Strategies of October 2023

The following are the top 10 funds from the 345 PMS strategies tracked and analysed by PMS Bazaar.

The top performers had an excellent outing during the month. They delivered nearly 5-10 percentage points more than the returns of the Nifty and BSE 500 in October. Many strategies did well in the month, though small and midcaps figured prominently in the top 10 list.

Topping the performance chart was the Value Mago strategy of Sheperd’s Hill Financial Advisors, with 8.94% returns during the month. The fund follows a flexi cap strategy and invests in a concentrated portfolio of 15-20 value stocks whose inherent values are not fully priced in by the markets.

Taking second place is the Emerging Opportunities strategy of Equitree Capital Advisors, with 5.83% returns in October. This strategy takes a multi-cap approach to stock picking. focused on small and microcap stocks that are under-researched and under-invested.

Aim Multi Cap of Credent Asset Management took the third slot and delivered 4.57% returns during the month. This fund was launched in March this year. Of the 29 funds that were launched in 2023, this fund has topped the chart with 45.29%. It invests in mid and small-cap stocks.

The performance of the top 10 strategies and their comparison with Nifty and BSE 500 for the month are given below.

Category-wise performance of PMS players

During the month, the average return of all categories was negative. Small caps were the best performers with the category delivering -0.6% in October. 

The small & midcap segment and the thematic category gave -1.35% and -1.19% during the month and did better than most others. The other four categories – multi-cap, large-cap, large & midcap and midcap – were all down to the extent of 2.2% to 2.75%. 

Midcaps were the worst performers as a category during the month.

The performance of the strategies is depicted below in the chart.

Small caps

October was a relatively better month for small-caps amidst volatile markets. During the month, the category gave just -0.6% on average, falling the least among all segments. Of the 18 small-cap PMS strategies, as many as 17 did better than the benchmark BSE 500 TRI and an equal number outperformed the Nifty 50 TRI in October.

The Emerging Opportunities fund from Equitree Capital Advisors topped the list in the category by delivering 5.83% returns during the month. 

Molecule Ventures’ Growth strategy came next with a 3.07% return during October. The fund makes a 75-80% allocation to a core basket of stocks (with secular themes and earnings visibility) and 20-25% allocation to opportunistic or market-driven picks.

Third in the list with 1.61% returns in the month was the Aurum Small Cap Opportunities strategy from Nine Rivers Capital. The fund invests in a concentrated portfolio of around 15 stocks segregated as alpha drivers and steady performers.

The performance of the category in October with respect to the BSE 500 TRI and Nifty 50 TRI is depicted in the graph below.

Small & Midcaps

The small and midcaps segment gave -1.35% returns on average during the month. 

Motilal Oswal’s IOP V2 strategy came first in the category with a 3.45% return in October.

The same PMS also had another strategy – IOP – taking the second place with 3.34% returns during the month.

Care Portfolio Managers’ Growth Plus Value strategy came third with 2.61% returns. The fund gives higher weightage in-stock selection to lower valuation multiples.

Midcap

Midcap strategies had a rough ride in October. The category gave -2.75% on average during the month. During the month, of the 25 strategies tracked, 13 managed to beat the Nifty 50 TRI, while 14 outperformed the BSE 500 TRI. 

Motilal Oswal’s Focused Midcap strategy was the best performer in the category and gave 1.82% returns during the month. It was the only strategy in the category to give positive returns during the month.

Unifi Capital’s APJ 20 took the second spot with -0.5% returns during the month. The fund focuses in stocks that would benefit the most from the Indian economic growth story.

Nafa Asset Managers’ Emerging Bluechip Portfolio came third with -1.12% returns in October. The fund invests in a diversified portfolio of 25-40 stocks with a focus on companies with high RoE, quality management and low leverage.

The chart below shows how the midcap strategy fared against the Nifty 50 TRI and BSE 500 TRI in October.

Large and Midcap

The 16 large and midcap funds delivered -2.54% on average in October, making it a weak month for the segment.

Samvitti Capital’s PMS Aggressive Growth strategy was the category topper with 0.56% returns during October. It was the only fund to end in the green during the month.

Green Lantern Capital’s Alpha Fund came second with -1.26% returns during the month.

The third in the chart was Samvitti Capital’s PMS Long Term Growth fund with -1.62% returns during October. 

Large cap

The Large Cap category had a tough month. The 26 funds in the category delivered -2.52% on an average during the month. As many as 16 beat the Nifty 50 TRI, and 17 outperformed the BSE 500 TRI in October.

Motilal Oswal’s Value Migration strategy came on top with 3.57% returns during the month. It was the only fund to end on a positive note in the category during October.

The Magnolia strategy from Karma Capital Advisors came second with -1.78% returns. This strategy takes the ‘growth at a reasonable price’ (GARP) approach to stock selection and looks to capture the India growth story.

Alchemy’s Alpha 100 came third in October with -1.81% returns.

In the chart below, the performance of the large-cap category average against the returns of the Nifty 50 TRI and BSE 500 TRI in October is depicted.

Multi-caps

The segment that has the highest number of funds managed -2.2% on average during October. As many as 103 funds of the schemes (more than 6 in 10) outperformed the BSE 500 TRI during the month, while 93 strategies outperformed the bluechip Nifty 50 TRI.

Credent Asset Management’s Aim Multi Cap fund came on top with 4.57% returns during the month. 

Stallion Asset’s Core fund gave 3.78% during the month and came second.

The Alpha Growth Fund of Ambit Global took the third spot with 2.17% returns in October. 

Thematic 

The thematic category had a relatively better month and the 14 funds delivered -1.19% on average during the month. 

All three top slots were taken by Green Portfolio’s funds. The Dividend Yield strategy came first with a 2.62% return in October, followed by MNC Advantage with a 1.04% return and The Impact ESG Fund with a 0.51% return.

Summary

October was a difficult month for the markets with US treasury yields fluctuating heavily and even topping 5% levels, prompting FIIs to sell equities. Indian g-sec yields across tenors, too, rose 20-25 basis points as the debt markets also turned a tad volatile. However, the inflation trajectory is downward in the US and even in India and most Western economies. Therefore, Central Banks may pause and go easy on interest rates for the foreseeable future.

As the domestic earnings season for the quarter draws to a close and the festive season dawns, the hopes are up for the Indian markets. Crude oil prices have cooled down considerably. However, any serious escalation in geopolitical tensions in West Asia may increase volatility in the markets.