After a tough October, November was an excellent month for the markets. As government security yields in the US and even domestically fell over the month and as Central Banks turned more dovish on interest rates, frontline indices rallied sharply.

PMS approaches had a fine run during the month and delivered quite well.

In November, the average return from the 355 PMS strategies was a healthy 7.38%. The bluechip Nifty 50 index gave a 5.60% return in the month, while the broader market BSE 500 TRI recorded a stronger 7.06% in November.

After three months of selling the month saw FIIs net buy to the tune of Rs 7,033 crore in the equity cash markets. DIIs net bought to the extent of Rs 226 crore.

As many as 277 PMS strategies (nearly eight in 10) delivered more than the Nifty TRI in November. Compared with the BSE 500 TRI, 201 schemes outperformed the benchmark during the month. 

The top performers came from multiple segments, suggesting a broad-based rally in the markets, though multi-cap and flexi-cap approaches had a slight edge.

Top 10 PMS Strategies of November 2023

The following are the top 10 funds from the 355 PMS strategies tracked and analysed by PMS Bazaar.

The top 10 schemes delivered spectacularly well in November. These funds gave twice the returns of the benchmark indices or higher during the month. 

Taking the first place in the chart was the Growth strategy of Molecule Ventures with a stunning 17.83% return during the month. This fund invests in small-cap stocks across two baskets – core (secular trends) and opportunistic (market-driven). The allocation is kept in a 75:25 or 80:20 proportion in these two baskets.

The next slot was taken by the Adaptive Momentum strategy of Capitalmind Financial Services with 15.59% returns in November. This fund follows a multi-cap strategy.

Wright Alpha Fund came third and delivered 15.19% in the month. It takes a flexi-cap portfolio approach. The fund follows a quantitative momentum process in identifying 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 more than 6%. Large & midcap, midcap and small & midcap strategies were the best categories with 8.8%, 8.5% and 7.99%, respectively during the month.  Small caps and thematic categories were relative underperformers as they gave 6.81% and 6.52%, respectively in November.

Overall, it was a reasonably satisfactory month for all categories of PMS strategies.

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

Small caps

November was not as spectacular a month for small caps as it was for a few other segments. During the month, the category gave a reasonably robust 6.81% on average.

Of the 19 small-cap PMS strategies, only 6 (one in three) did better than the benchmark BSE 500 TRI. However, as many as 13 strategies outperformed the Nifty 50 TRI in November.

Molecule Ventures’ Growth strategy came on top with a 17.83% return during the month. 

Taking the second spot was the Supervalue Aggressive fund from Right Horizons with 10.68% in November. The fund invests in a concentrated portfolio of mid and small-cap stocks with a focus on identifying multi-baggers.

The third place was taken by the India Opportunities Product from Aequitas Investment Consultancy with 9.03% returns.

The performance of the category in November 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 a robust 7.99% returns on average during the month. All three top strategies gave double-digit returns in November.

Magadh Capital Advisors’ Future Stars fund came on top with 12.81% returns during the month. The fund selects stocks by following bottom-up/top-down analysis.

Taking the second slot with 12.07% returns was the Growth Fund from Green Lantern Capital. The fund invests in a portfolio of companies of industry leaders with healthy ROE, and trade with a high margin of safety.

Sageone’s Core Portfolio came third with 11.43% returns in November.

Midcap

Midcap strategies had a strong run November. The category gave 8.5% on average during the month. During the month, of the 24 strategies tracked, 23 managed to beat the Nifty 50 TRI, while 18 outperformed the BSE 500 TRI. 

Asit C Mehta Investment Intermediates’ ACE Midcap fund came on top with 15.13% returns during November. 

Unifi Capital’s APJ 20 took the second spot with 11.19% returns during the month. The fund focuses on stocks that would benefit the most from the India economic growth story.

Motilal Oswal’s Mid to Mega (Focused Midcap) came third with 10.73% returns during the month. The strategy invests in stocks within the universe of 101-400 as per market capitalisation, with some allocation to large caps.

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

Large and Midcap

This category was the best performer of the month in terms of returns delivered. The 16 large and midcap funds delivered 8.8% on average in November, making it one of the best months for the segment.

Green Lantern Capital’s Alpha Fund came on top with 13.41% returns during the month. The strategy invests in market leaders with strong balance sheets, superior earnings growth and steady free cash flows.

The second slot was taken by the Smart Alpha 250 strategy from Alchemy with 12.44% returns during the month. This fund uses an objective, back-tested and data-driven approach to select stocks.

True Beacon Investment Advisors’ Equity Factor Quant strategy came s close third with 12.3% in November. 

Large cap

The Large Cap category had a reasonably sound month. The 25 funds in the category delivered 7.49% on average during the month. As many as 21 beat the Nifty 50 TRI, and 12 outperformed the BSE 500 TRI in November.

Tulsian PMS came on top with a robust 13.5% returns in November. The fund invests in a portfolio of 10-15 stocks that are selected with a bottom-up approach.

Marcellus’ Global Consistent Compounders came second with 11.54% returns during the month.

The Growth & Value fund of JM Financial Services came third with 11.05% returns in November.

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 November is depicted.

Multi-caps

The segment that has the highest number of funds gave 7.51% on average during November. As many as 131 funds (8 in 10) outperformed the Nifty 50 TRI during the month, while 98 strategies outperformed the BSE 500 TRI.

The Adaptive Momentum strategy of Capitalmind Financial Services with 15.59% returns in November topped the list.

Carnelian Asset Advisors’ YNG Strategy came second with 13.95% returns during the month. The strategy is focused on delivering a blend of growth and dividend yield.

The Fusion Opportunity Strategy of Narnolia Financial Advisors came third with 13.57% returns in November.

Thematic 

The thematic category was the worst performer in November, but still delivered a respectable 6.52% on an average during the month. 

Green Portfolio’s Dividend Yield strategy came first with 13.3% return in November.

Two funds from Valcreate Investment Managers took the second and third spots. The Lifesciences and Speciality Opportunities fund gave 9.3% during the month, while the IME Digital Disruption strategy delivered 8.91%.

Summary 

November was a stupendous month for the markets with many global and local uncertainties fading away. The treasury yields in the US and India fell substantially, thus increasing FII interest in Indian stocks. 

The political arena witnessed some certainty after State elections saw favourable outcomes.

Inflation continues to head down and interest rates seem to have peaked out. The Federal Reserve has also indicated rate cuts in 2024. With India’s second-quarter GDP growth surging 7.6% and all fast-moving economic indicators showing sharp momentum, the macro picture looks strong for India.

Up until now, this year, DIIs have done much of the heavy lifting. Given the favourable picture as seen from the above-mentioned positive developments, FIIs are likely to join the party as well.

The frontline indices look set for a period of sustained rally.