Continuing with the weak momentum in the previous month, the markets continued to sulk in January. Given that it was a period running up to the Union Budget, markets were in an uncertain mode. All the main indices ended in the red during January 2023. FIIs continued to sell. They sold stocks worth Rs. 30,000 crore during the month. The Nifty as well as the mid and small-cap indices recorded somewhat similar performances in January. During the month, 171 of the 311 PMS strategies (a little over half) delivered better returns than the Nifty. Asset allocation would have worked, given that multi-asset fund strategies had a strong January.
Top 10 PMS Strategies of January 2023
From a list of 311 PMS strategies tracked and analyzed by PMS Bazaar, the top 10 funds of January are as given below.
The strategies focused on multi-asset allocation were the best performers in the month. Four of the top 10 performers for January were multi-asset PMS strategies. A few multi-cap and small-cap strategies also did well and were featured in the list.
Pace Financial Investment Adviser’s sustainer strategy, which follows a balanced style was on top of the list with 3.29% returns in January.
Coming second in the chart was the India Rising SME Stars of Hem Securities, which invests in small and medium-sized enterprises, with 3.08% returns.
Next on the list was the Prive 1 strategy of Pace Financial Investment Adviser, which offers a customized portfolio, with a 2.78% return during the month.
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The following chart gives the returns of the top 10 PMS strategies in January 2023 and benchmarks these to the Nifty, which is depicted by the bar line.
Category-wise performance of PMS players:
Here is the chart that represents how various strategies across market capitalization were delivered during January 2023.
The small-cap segment was the best among the lot, with a -1.05% return during the month. The small and midcap strategy came next with a -1.44% return. All other strategies delivered lower than -2.5% return during January, with the large & midcap segments giving the least returns.
Small-caps:
The small-cap category had a fairly reasonable run during the month. As many as 16 of the 18 strategies tracked the BSE Small Cap.
We had the India Rising SME Stars strategy of Hem Securities as the top performer in the segment, with 3.08% returns during January.
Counter-Cyclical Investments’ diversified long-term value strategy came in second in the category, at 2.35% returns during the month. At the third spot was Aequitas Investment Consultancy’s India Opportunities Product with 0.1% returns. This fund follows a mix of value, contrarian, and growth strategies and invests in small and microcaps. The performance of the category in relation to the BSE Small Cap is depicted in the graph below.
Small & Midcaps:
This category has 28 PMS strategies and delivered -1.44% in January 2023. On top was iThought Financial Consulting’s vrddhi with 2.28% returns. The strategy invests in emerging giants of mid, small, and micro-cap segments. Edelweiss Asset Management's focused mid-small cap came in next with 0.81% returns. The third in the list was the Abakkus Emerging Opportunities Approach of the Abakkus Asset Manager, with a 0.7% return in January.
Midcap:
Those strategies that were focused on midcaps continued their modest showing in January as well. Only 8 of the 21 schemes outperformed the Nifty Midcap 100 return of -2.64% during the month. The category average was marginally lower, at -2.76%. First in the category was the Clean Tech Portfolio strategy of Nafa Asset Managers with 1.45% returns. The focused midcap strategy of Motilal Oswal came second with -1.15% returns. This fund is focused on value investing. The Ace Midcap strategy of Asit C Mehta Investment Intermediates was third with -1.66% returns. It invests in undervalued, high-quality stocks, and follows an equal-weighted approach.
The graph below gives the relative performance of the midcap strategy versus the Nifty Midcap 100 index in January 2023.
Large and Midcap:
For January 2023, the 11 large & midcap PMS strategies delivered an average of -2.82% returns.
The three funds topping the list during the month were: Care Portfolio Managers’ Large & Midcap strategy (-0.21%), Bonanza’s Growth strategy (-2.33%), and IDFC Asset Management’s Neo Equity Portfolio (-2.64%). All funds in the segment delivered negative returns in January.
Large-cap:
The category put up an average show in January 2023. We had 10 of the 25 large-cap strategies outperforming the Nifty. Even so, only one strategy delivered positive returns during the month. The category average return was -2.68% in January. The CO-IN strategy of iThought Financial Consulting topped the list with 1.66% during the month. This strategy limits the investment universe to the Nifty but eliminates weaker stocks in the index. Next in the chart was the Exposure Equity Index Strategy from Agreya Capital Advisors, which involves buying options. It gave -a 0.51% return during the month. Asit C Mehta Investment Intermediates’ ACE 15 strategy, which invests in under-valued, high-quality stocks, came third with -0.68% returns during January.
The bar charts below demonstrate the performance of the large-cap category average against the returns of the Nifty during January 2023.
Multi-caps:
Multi-cap strategies staged a fairly healthy show in January. Of the 154 funds in the category, 104 (nearly 7 in 10 strategies) outperformed the broader market BSE 500 index return of -3.36% during the month. The category average return was -2.55%.
NJ Asset Management’s blue-chip strategy came on top with 2.26% returns during the month. The Dynamic Stock Allocation strategy of the same AMC was second with 2.09% returns. Carnelian Asset Advisors’ YNG strategy, which invests in companies delivering growth and also offering dividend/FCF yield, was third with 1.32% returns in January.
The graph below gives the performance comparison of the multi-cap PMS category and the benchmark BSE 500.
Thematic:
The thematic category had a rough January, as the category average was a low -2.86% with just 1 out of 12 strategies yielding positive returns for the month. All of the top three strategies in the segment were from Green Portfolio. The Super 30 strategy delivered 0.08% and topped the charts. Next was the impact ESG strategy with -1.23% returns, while the dividend yield fund gave -1.25% returns and came third.
The markets continue to be volatile. Inflation reared its head once again in February, and the RBI has also increased interest rates by 25 basis points, maintaining a hawkish stance. While the Union Budget set out many positives and a big event is out of the way, the markets will still be looking for the return of FIIs to buying mode soon.
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