Of the 391 PMS strategies analysed by PMS Bazaar as on Feb, 2025, only 43 outperformed the Nifty 50 TRI (-5.79%), while 115 surpassed the S&P BSE 500 TRI (-7.74%)

The market downturn persisted in February 2025, with the Nifty 50 TRI sliding 5.79% month-over-month (MoM), marking its fifth consecutive month in the red. This was the second-steepest MoM decline since March 2020, driven by slowing earnings growth, global economic concerns stemming from the ongoing tariff war, and sustained foreign institutional investor (FII) outflows. Large caps eked out a 1% gain over the past 12 months, outperforming midcaps (-1%) and smallcaps (-8%), though midcaps and smallcaps have significantly outpaced large caps over the last five years.

This turbulent environment weighed heavily on Portfolio Management Services (PMS) strategies. Of the 391 PMS strategies analysed by PMS Bazaar as on Feb, 2025, only 67 outperformed the Nifty 50 TRI (-5.79%), while 143 surpassed the S&P BSE 500 TRI (-7.74%). Interestingly, this is a much better show than in January-2025 when markets had fallen lesser. Just two equity PMS strategies managed to post positive returns in Feb-2025, with the best performer delivering 4.99%, while the worst saw a steep -22.36% drop.

This article examines PMS performance, category-wise returns, and how leading asset managers navigated February’s challenges.

Top-10 Performing PMS Strategies in February 2025

Amid ongoing market corrections, Equity PMS strategies have struggled, with broader market in-dices experiencing sharp declines. In contrast, Debt PMS strategies have taken the lead in preserv-ing capital, demonstrating their resilience. As reflected in the table, 8 out of the top 10 performing PMS strategies this month are debt, while only 2 are equity-based. Debt PMS generally outperform equity strategies during market downturns due to their lower volatility and focus on capital preser-vation through Fixed-income instruments.

Leading the pack among Equity PMS is Wave Asset’s Bloom Strategy, delivering an impressive 4.99%, making it the only PMS to generate a meaningful gain amid the Market turmoil. Focused on the large & mid-cap segment, the Bloom strategy prioritizes investing in high-quality compa-nies with strong fundamentals, disciplined management, and sustainable growth, but only when they’re available at attractive valuations. Meanwhile, Aequitas Investment Consultancy’s India Opportunities PMS, a small-cap strategy, secured the eighth position with 0.48%, outperforming its peers despite sharp declines in the broader small-cap segment. Known for its high-conviction investing style, this strategy carefully balances strong corporate governance with bottom-up stock selection, identifying high-quality businesses with superior return ratios.

On the Debt PMS front, 5 out of the 8 debt PMS strategy in the top 10 have outperformed their benchmarks, reinforcing their defensive advantage in a weak market. The best-performing debt PMS and second-best PMS overall was Phillip Capital’s Income Builder portfolio, delivering 1.06%. This strategy aims to outperform G-Secs through a focus on capital preservation, stable yields, and risk-adjusted returns, utilizing rigorous due diligence, spread compression analysis, secondary market opportunities, and event arbitrage to optimize performance. Other notable debt PMS performers include Neo Asset Management’s Neo Yield Enhancer (0.98%) and Estee Advi-sors’ I-Alpha strategy (0.94%), both comfortably surpassing their respective benchmarks.

Overall, Debt PMS strategies have taken center stage last month, effectively preserving and mod-estly growing capital amid heightened market volatility due to hefty FPI Outflows. Meanwhile, the Wave Asset Bloom and Aequitas India Opportunities equity strategies have proven their resilience by successfully navigating the equity downturn.

Category Scan: February 2025

February 2025 proved even tougher for PMS strategies, with all categories posting losses amid persistent market weakness. While large & mid-cap strategies (-6.29%) contained some downside, small-cap PMS (-12.37%) saw the steepest declines, reflecting sharp corrections in riskier segments.

The flexicap (-8.53%) and multi-cap (-9.44%) categories struggled as broad-based volatility pressured stocks across market caps. Thematic strategies (-11.00%) also suffered, reflecting sectoral headwinds, while midcap (-11.06%) and small & midcap (-11.28%) categories faced aggressive sell-offs.

The magnitude of losses highlights the challenging environment, with no category showing resilience. Even among the best-performing segment, large & mid-cap PMS, fewer than a handful of strategies managed to contain losses below market benchmarks.

Despite the downturn, select PMS strategies effectively cushioned the downside. Below is a breakdown of category-wise performance for February 2025.

Large & Mid-Cap PMS Performance 

Large & mid-cap PMS strategies emerged as the most resilient PMS category in February 2025, averaging -6.29%, outperforming the broader market decline. While the segment still recorded losses, it fared better than the S&P BSE 500 TRI (-7.74%) and was only slightly weaker than the Nifty 50 TRI (-5.79%).

Out of 16 PMS schemes in this category, 10 outperformed the BSE 500 TRI, while five also outpaced the Nifty 50 TRI, reflecting relative stability in large and mid-cap stocks despite overall volatility.

The top performer was Wave Asset Private Limited’s Bloom strategy, delivering an impressive 4.99% return, making it the best-performing PMS across all categories in February. This significant outperformance suggests a strong stock-selection approach, possibly benefiting from defensive allocations or sectoral positioning.

Other notable performers included Torus Oro Portfolio’s All Weather Portfolio (-3.40%), True Beacon’s EqFactorQuant (-4.16%), and Value Prolific’s Balanced B (-4.31%), all containing losses significantly better than the category average.

While large & mid-cap strategies weathered the correction better than smaller-cap counterparts, even this relatively strong segment saw only one PMS strategy post positive returns. The resilience of this category highlights its role in mitigating downside     risk amid volatile markets.

Here are the top-5 performers of this category.

Large-Cap PMS Performance 

Large-cap PMS strategies declined 7.44% on average in February 2025, underperforming the Nifty 50 TRI (-5.79%) but slightly outperforming the S&P BSE 500 TRI (-7.74%). While large caps provided some stability amid market turbulence, they did not escape the broader sell-off.

Out of 25 large-cap PMS schemes, 17 outperformed the BSE 500 TRI, while only five managed to beat the Nifty 50 TRI, indicating that despite relative resilience, large-cap strategies struggled to keep pace with the broader large-cap index.

The top performer was Agreya Capital’s Momentum Strategy (-4.31%), significantly limiting losses compared to the category average. ithought Financial’s TRUBLU (-4.55%) and Ambit Investment’s Coffee Can (-5.44%) also showed strength, demonstrating their ability to contain downside risks effectively.

Other notable performers included Value Prolific’s Conserve C (-5.51%), Pelican Holdings’ PE Fund (-5.72%), and Acepro Advisors’ Large Cap Strategy (-6.29%), all of which outperformed the category average.

While large-cap PMS strategies fared better than mid and small caps, none posted positive returns, highlighting the widespread market weakness. However, their relative outperformance suggests that portfolio stability and strong stock selection played a crucial role in mitigating losses.

Here are the top-5 performers of this category.

Flexi-Cap PMS Performance 

Flexi-cap PMS strategies faced a challenging month, averaging -8.53%, making them one of the weaker PMS categories in February 2025. This decline was steeper than both the Nifty 50 TRI (-5.79%) and the S&P BSE 500 TRI (-7.74%), highlighting the broad-based weakness across large, mid, and small-cap stocks.

With 62 PMS schemes, this was one of the largest PMS categories, offering a diverse range of strategies. However, only 23 outperformed the BSE 500 TRI, while just 11 managed to beat the Nifty 50 TRI, indicating that most struggled to mitigate losses.

The top performer was East Green Advisors’ Quant Strategy (-1.93%), significantly limiting its drawdown. Eklavya Capital’s Equity PMS (-2.68%) and Clearview Capital’s Long Term Partners Fund (-3.49%) also outperformed the category average, showcasing effective downside risk management.

Other notable performers included Spark Asia Impact’s India at 75 FlexiCap (-4.82%), PRPEdge Wealth’s Alphaa Better Risk Reward 30 Stocks (-4.83%), and Capital 8 LLP’s Infinity Fund (-4.97%), all of which kept losses in check compared to the broader flexi-cap category.

Despite overall weakness, some flexi-cap PMS strategies displayed resilience, reinforcing the importance of stock selection and risk management in volatile markets.

Here are the top-5 performers of this category.

Multi-Cap PMS Performance 

Multi-cap PMS strategies had a difficult month, with an average return of -9.44%, making it one of the worst-hit PMS categories. This performance was significantly weaker than the Nifty 50 TRI (-5.79%) and the S&P BSE 500 TRI (-7.74%), reflecting the broad-based correction across market caps.

With 174 PMS schemes, multi-cap was the largest PMS category by the number of strategies. However, only 48 outperformed the BSE 500 TRI, while just 16 managed to beat the Nifty 50 TRI, indicating that the majority struggled amid market volatility.

The top performer was Qode All Weather (-1.64%), showing strong downside protection. Value Prolific’s Alpha A (-1.79%) and Maxiom Asset’s PMS - EMERALD (-2.78%) also fared well relative to their peers, highlighting their ability to manage risk effectively.

Other notable performers included Qode Tactical Fund (-3.09%), Atlas Integrated’s Multicap PMS Fund (-3.55%), and Chanakya Capital’s Growth Plan (-4.15%), which kept losses lower than the category average.

Despite overall weakness, select multi-cap strategies demonstrated resilience, proving that diversified stock selection and risk control can help mitigate drawdowns in volatile markets.

Here are the top-5 performers of this category.

Thematic PMS Performance 

Thematic PMS strategies struggled in February 2025, posting an average return of -11.00%, making it one of the worst-performing PMS categories. This was significantly weaker than both the Nifty 50 TRI (-5.79%) and the S&P BSE 500 TRI (-7.74%), underscoring the category’s vulnerability during broad-based market corrections.

With 19 PMS schemes in this segment, thematic strategies vary widely based on their underlying themes, including healthcare, digital disruption, and global businesses. However, only four schemes managed to outperform the BSE 500 TRI, and none beat the Nifty 50 TRI, indicating that even the best thematic strategies struggled in the market downturn.

The top performer was InCred Asset Management’s Focused Healthcare Portfolio (-6.31%), showing relative resilience. White Oak Capital’s Digital Leaders (-7.48%) and Anand Rathi’s MNC PMS (-7.59%) also managed to contain losses better than most thematic strategies.

Other notable performers included HSBC India Next Portfolio (-7.69%), Narnolia Financial’s 5TX5T (-7.93%), and Valcreate’s IME Digital Disruption (-8.30%), which fared slightly better than the thematic category average.

While the thematic segment saw steep declines, some strategies managed to cushion losses better than others, reflecting the impact of sectoral positioning and risk management.

Here are the top-5 performers of this category.

Mid-Cap PMS Performance 

Mid-cap PMS strategies had a difficult month, posting an average return of -11.06%, making them one of the weakest-performing PMS categories. This was significantly lower than both the Nifty 50 TRI (-5.79%) and the S&P BSE 500 TRI (-7.74%), highlighting the heavy correction in mid-cap stocks amid market volatility.

With 23 PMS schemes, the category remained diverse, featuring different investment themes and strategies. However, only one scheme managed to outperform the BSE 500 TRI, and none were able to beat the Nifty 50 TRI, underscoring the widespread weakness in mid-caps.

The top performer was Marcellus Investment Managers’ Rising Giants Portfolio (-7.66%), which managed to limit its losses better than the broader mid-cap segment. Unifi Capital’s BCAD (-8.01%) and Ambit Investment’s Good and Clean (-8.91%) also contained drawdowns better than most, demonstrating relative resilience.

Other notable performers included Unifi Capital’s BCAD2 Breakout 20 (-8.97%), Marcellus’ Little Champs (-9.60%), and Concept Investwell’s Marvel (-9.65%), which kept losses slightly below the category average.

While no mid-cap PMS strategy managed to generate positive returns, select funds mitigated losses more effectively, reinforcing the importance of defensive positioning and stock selection in volatile markets.

Here are the top-5 performers of this category.

Small & Mid-Cap PMS Performance 

Small & mid-cap PMS strategies had a difficult month, posting an average return of -11.28%, making it one of the hardest-hit PMS categories. This performance was significantly weaker than both the Nifty 50 TRI (-5.79%) and the S&P BSE 500 TRI (-7.74%), reflecting the sharp correction in smaller stocks amid persistent market volatility.

With 43 PMS schemes, this segment struggled to weather the downturn, though 7 outperformed the BSE 500 TRI, and only 3 beat the Nifty 50 TRI. This indicates that only a handful of strategies managed to limit losses effectively.

The top performer was Atlas Integrated Finance’s Midcap PMS Fund (-2.15%), significantly outperforming both the category and broader market. Green Lantern Capital’s Growth Fund (-4.96%) and QED Capital’s Alphabets (-5.16%) also showed relative resilience, keeping losses well below the category average.

Other notable performers included Magadh Capital’s Future Stars (-6.87%), Fyers Asset Management’s Fyers Genesis Fund (-7.20%), and Wallfort PMS’ Avenue Fund (-7.36%), all of which contained losses better than most of their peers.

Despite the category’s weakness, a few select PMS strategies managed to cushion losses, underscoring the role of strategic stock selection and active management in volatile conditions.

Here are the top-5 performers of this category.

Small-Cap PMS Performance 

Small-cap PMS strategies suffered the steepest losses among all PMS categories, with an average return of -12.37% in February 2025. This was significantly worse than both the Nifty 50 TRI (-5.79%) and the S&P BSE 500 TRI (-7.74%), highlighting the heavy correction in small-cap stocks.

With 24 PMS schemes, the segment saw broad-based losses, with only 2 strategies outperforming both the BSE 500 TRI and Nifty 50 TRI, reflecting the sharp downside in riskier small-cap stocks.

The top performer was Aequitas’ India Opportunities Product (0.48%), standing out as the only PMS strategy across the category to generate a positive return. Alchemy Capital’s Alpha Small Cap (-5.67%) also managed to contain losses significantly better than the category average, demonstrating relative resilience.

Other notable performers included TCG Advisory’s Transformative Growth (-7.85%), Accuracap’s Dynamo (-10.35%), and NAFA Asset Managers’ Small Cap Portfolio (-10.36%), all of which fared be    tter than most small-cap PMS strategies.

Despite the severe correction, a few select strategies managed to cushion losses, emphasizing the role of robust stock selection and active management in navigating small-cap volatility.

Staying the course

The recent market correction and slowdown in earnings growth have undoubtedly weighed on PMS performance, but long-term investors should remain optimistic. The Nifty 50 has recorded just 4% PAT growth in 9MFY25, a sharp slowdown from the 20%+ CAGR seen during FY20-24. However, these cycles are a normal part of investing, and corrections often set the stage for the next phase of growth.

While corporate earnings expectations for FY26 may be adjusted lower, the recent downturn has already factored in some of the potential disappointments. Importantly, market valuations have now moderated, with the Nifty trading at a 12-month forward P/E of 18.6x, below its long-period average of 20.5x.

Investors should focus on quality PMS strategies with a disciplined approach to stock selection and risk management. Volatility creates opportunities, and PMS managers with a strong track record of navigating downturns tend to emerge stronger in recoveries. Investors should stay diversified, patient, and focused on long-term wealth creation rather than reacting to short-term market swings.