Small-Cap, Mid-Cap Strategies outshine Large-Caps and broader markets

Domestic Markets increased by 6.6 per cent (Nifty) in the month of February. The month saw a memorable Union Budget. Also, GDP moved out of recession, and foreign flows accelerated. In this backdrop, India's multi-billion PMS industry continued to generate alpha, with every second fund beating the Nifty. The spotlight was on Small-Cap, Mid-Cap Strategies that outshined Large-Caps. Holdings in smaller companies rose in value as investors took advantage of relatively cheaper valuations. Top PMSes generated 15-20 per cent this month, out-performing benchmark indices by a hefty margin. Here is the monthly report on PMS fund performance for the period ended February 28, 2021.

The very best

The five best performer for February 2021 are Right Horizons Super Value (up 21.74 per cent), Roha Asset Managers Emerging Champions (up 20.15 per cent), Valentis Advisors Rising Star Opportunity (up 19.43 per cent), Centrum PMS Multibagger (up 16.69 per cent) and Good to Great (up 16.35 per cent).

Making into the top-10 club were TCG Advisory Services RAF Fund (up 15.15 per cent), Nine Rivers Capital Aurum Small Cap Opp. (up 15.10 per cent), Centrum PMS Deep Value (14.55 per cent), Systematix Dynamic Investment Portfolio (up 14.53 per cent) and Hanut Fundamental Quant (up 14.46 per cent).

Do note that Valentis, and Roha Asset Managers schemes also figured in the top-10 list of January 2021. But in that month returns were comparatively sedate as the market mood turned negative ahead of the Union Budget.

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Category scan

Let us now take a detailed look at how key PMS categories performed in February 2021.

Large-cap: The category average in February 2021 was 4.86 per cent, which is lower than the Nifty. Category leaders such as Motilal Oswal Value (up 8.84 per cent), Aditya Birla Capital Top 200 CEP (up 8.15 per cent) and Right Horizons India Business Leader (up 7.30 per cent) outperformed markets. No large-cap PMS was in negative return territory.

Large & Mid-cap: This is a small category of 6 schemes. The category average for the month was 4.35 per cent. The Top performer was Agreya Capital Diversified Growth Capital (up 6.36 per cent), LIC MF Value Equity + (up 6.06 per cent) and IDFC NEO Equity Portfolio up by 4.34 per cent

Mid-cap: The category average was 9.81 per cent, boosted by massive gains in most of the 21 mid-cap PMS strategies. Top performers were Right Horizons Super Value (up 21.74 per cent), Centrum PMS Multibagger (up 16.69 per cent) and Good to Great (up 16.35 per cent). Do note that the category average underperformed Nifty Midcap 100 that clocked over 11 per cent gain in February 2021.

Small & Mid-cap: In this 16-member category, the average for February 2021 was also up 9.81 per cent, which is quite handsome. Top performers were Valentis Advisors Rising Star Opportunity (up 19.43 per cent), Moat Financial Services Mid & Small Cap (up 14.33 per cent) and Edelweiss Focused Smallcap (up 12 per cent).

Multi-cap: Do note that this is the biggest category in terms of the number of schemes across the PMS industry. The category average for this month was 7.08 per cent, which is slightly lower than BSE 500 index (up 7.8 per cent). The top multi-cap performers this month were TCG Advisory Services RAF Fund (up 15.15 per cent), Hanut Alternate Investments Hanut Fundamental Quant (up 14.46 per cent), Centrum PMS Wealth Creator (up 14.26 per cent), Globe Capital Market Value (up 14.11 per cent) and TCG Advisory Services Multicap Fund (up 13.39 per cent).

Small-cap: This category has about 14 PMS strategies, and the category average for February 2021 was 8.95 per cent. The BSE Small Cap index gained 12 per cent this month. The top performers of the month included Roha Asset Managers Emerging Champions (up 20.15 per cent), Nine Rivers Capital Aurum Small Cap Opp. (up 15.10 per cent) and ICICI Pru PIPE (up 12.53 per cent).

Others: In small and niche categories, Trivantage Capital Management Resurgent Financials Equity (up 10.66 per cent), Right Horizons Alphabots India Prime (up 9.90 per cent) and Green Portfolio Dividend Yield (up 9.85 per cent) stood out in sector & thematic segments .