55 PMSes out of 170 beat Nifty that clocked 19.8% gain in the last 3 months; Strategies clocked upto 23% spurt in June 2020
Success is not final, failure is not fatal: it is the courage to continue that counts. In March 2020, as the Covid-19 lockdown started, stock markets feared the worst and tanked sharply. The equity market sell-off took a heavy toll on the performance of portfolio management services or PMS strategies, with some taking hits of as high as 40% in that one fateful month alone. Fast forward to June 2020, things are markedly different. As markets rebounded after hitting the nadir, PMS investors who braved the March madness are laughing all the way to the bank, with up to cumulative 56% gains in Apr-June period.
The picture looks pleasantly different in the 1-year return matrix too, as over two dozen strategies are showing positive gains and the best PMS has generated a 36% jump even in these trying times. The month of June saw markets continuing their climb uphill as some more lost ground was recovered, and PMSes positioned smartly notched up solid gains. This underlines how PMSes continue to out-perform markets.
A month in review
After some consolidation in May, the month of June saw markets and PMSes deliver a spirited performance. The largecap-oriented Nifty index clocked a handsome 7.53% gain, but as many as 68 PMSes of the 170 tracked by PMSBazaar beat the index. Simply put, 4 out of every 10 PMSes generated alpha when compared to 50-share Nifty.
The 5 best performers of June 2020 were Globe Capital Market Value (up 23.38%), Karma Capital Advisors Long Only India Public Equity (up 21.50%), Nine Rivers Capital Aurum Small Cap Opp. (up 20.90%), Basant Maheshwari Wealth Advisers Equity Fund (17.78%) and Asit C Mehta Investment Intermediates Ace Multicap (up 16.40%). You can notice the dominance of multicap schemes in this elite list. The multicap category notched up an average return of 7.36%.
Largecap PMS category delivered 6.13% average return. The best performers include Varanium Capital Advisors Large Cap Focused Fund (up 9.00%), AcePro Advisors Largecap Strategy (up 8.47%) and Tata PMS Consumption (up 8.35%).
In the Midcap PMS category, June 2020 average gain was a solid 8.48%. The best performers included Centrum PMS Multibagger Deep Value I and Good to Great (both up 13%), Sundaram Alternates S E L F Portfolio (up 12.60%), Centrum PMS Deep Value IV (up 11.6%), Crest Wealth Management Emerging Bluchip (up 10%) and Invesco Caterpillar (up 9.8%).
In the Smallcap PMS category, the June 2020 average gain was 10.64%. The best performers include Nine Rivers Capital Aurum Small Cap Opp. (up 20.90%), Right Horizons Minerva India Under-Served (13.70%), and Centrum PMS Micro (up 13.50%).
In smaller categories, there were distinct winners. The Small & Midcap category best performer was Motilal Oswal IOP V2 (up 14.03%). In sector funds, Trivantage Capital Management Resurgent Financials Equity clocked the best gain of 12%. In thematic PMSes, Right Horizons Alphabots India Prime was the best with 8.74% return.
April to June show
The period from April to June marks a strong comeback for equity markets, and by extension, the PMSes. If March was terrible, April saw the first signs of recovery, followed by some consolidation in May and then June reiterated that markets were ready to move beyond Covid-19.
In the 3 month period ended June 30, the largecap-oriented Nifty index clocked a rollicking 19.8% gain. As many as 55 PMSes of the 170 tracked by PMSBazaar beat the index's gain i.e. out of every 10 PMSes, 3 generated alpha when compared to 50-share Nifty.
The 5 best performers of April-June 2020 were Karma Capital Advisors Long Only India Public Equity (up 56.7%), Globe Capital Market Value (up 43.05%), Nine Rivers Capital Aurum Small Cap Opp. (up 40.2%), Equirus Securities Long Horizon Fund (up 39.64%) and Kotak Pharma (up 34.3%).
The multicap category notched up a 3-month average return of 17.4%. Apart from Karma Capital and Globe Capital schemes, the best performer list includes ICICI Pru Contra Portfolio (up 28.4%), Asit C Mehta Investment Intermediates Ace Multicap (up 28%) and Aditya Birla Capital Innovation (up 27.19%).
Largecap PMS category delivered a 3-month 17.07% return. The best performers included ICICI Pru Largecap Portfolio (up 30.77%), AcePro Advisors Largecap Strategy (up 24.55%), and Asit C Mehta Investment Intermediates ACE 50 (up 24.5%).
In the Midcap PMS category, April-June 2020 average gain was a robust 20.21%. The best performer list contains names like Crest Wealth Management Emerging Bluchip (up 26.1%), Centrum PMS Multibagger Deep Value I (up 25.6%), Centrum PMS Good to Great (up 24.9%), Centrum PMS Deep Value IV (up 24.9%), Invesco Caterpillar (up 23.31%) etc.
In the Smallcap PMS category, the 3-month average gain was 24.1%. The best performers included Nine Rivers Capital Aurum Small Cap Opp. (up 40.2%), Right Horizons Minerva India Under-Served (28%), AccuraCap PicoPower (up 26.4%) etc.
The Small & Midcap category best performer was Equirus Securities Long Horizon Fund. The best sector fund was Kotak Pharma. The best Large & Midcap PMS was Bonanza Growth with 20.47%. Green Portfolio Dividend Yield PMS was the best among thematic plays with a solid 20.41% gain in the last 3 months.
As things stand today, the 1-year return picture looks pleasantly good. Mind you that markets are down by 12-17% in this period depending on your benchmark.
In the 1-year period ended June 30, the largecap-oriented Nifty index has declined by 12.61%. PMSes have done a remarkable job in terms of wealth protection, with 107 out of 155 falling less than the Nifty. So, nearly 7 out of every 10 PMSes have shielded investors better than Nifty.
Despite negative markets, the 5 best performers of the last 1 year have generated double-digit positive % gains. They are led by two sector funds viz. Kotak Pharma (up 36.6%) and Valcreate Inv. Managers Lifesciences & Specialty Opp. (up 36.12%). Wize Market Analytics Capital Mind - Momentum is 3rd (up 24.36%), Estee Advisors Long Alpha is 4th (up 19.79%) and Marcellus Consistent Compounders is 5th (up 17.3%).
The multicap category notched up a 1-year average return of -7.4%, out-performing the BSE 500's loss of 12.12%. Apart from Wize Market Analytics, Estee Advisors and Marcellus schemes in the category, the best performer list includes Globe Capital Market Value (up 8.53%) and Stallion Asset Core Fund (up 8.37%).
Largecap PMS category delivered a 1-year -6.42% return, out-performing Nifty. The best performers list in 1-year period contains names like Ambit Inv. Advisors Coffee Can (up12.6%) and Pelican PE Fund (up 11.71%).
In the Midcap PMS category, the 1-year average gain was -5.91%, which is an out-performance compared to Nifty 100's loss of 16.71%. The best performers included Phillip Capital Emerging India Portfolio (up 4.36%) – and Centrum PMS Deep Value IV (up 4.10%).
In the Smallcap PMS category, the 12-month average gain was -13.33%, which was an under-performance compared to BSE SmallCap's -13.1% return. The best performer was Ambit Inv. Advisors Emerging Giants (up 7.5%), which is creditable in such a market.
The arbitrage PMS category saw Estee Advisors I-Alpha notching up 13.13% and becoming the winner. Karvy Capital Demter was the best performing debt scheme in 1 year with 11.97%. Thematic PMSes were led by Anand Rathi Advisors MNC that clocked 10.5% gain. The Small & Midcap list was led by Equirus Securities Long Horizon Fund with 5.85%, while the Large & Midcap space was led by Emkay Lead PMS (up 0.4%)
Despite correcting markets, 60 of the 61 category 3 long-only AIFs outperformed Nifty 50 in August.
Alternative Investment Funds (AIFs) are thriving even in volatile and falling markets. Their performance in August is evidence of their resilient showing. During the month, category 3 long-only funds delivered robust returns. There are two key Category 3 AIF strategies, long-only and long-short. The long-only funds invest in domestic listed companies and have a transparent structure, without any restrictions on the investment universe or mandates for specific allocation patterns.
Amidst weak markets, 336 of 342 PMS strategies outperformed Nifty in August.
After four continuous months of rallying, the markets finally hit the brakes in August as key indices corrected a wee bit. But PMSes defied the trend and continued their healthy run despite weak markets. During the month, the 342 PMSes tracked delivered 2.62% on average. The benchmark Nifty recorded a -2.31% return in August, while the broader market BSE 500 TRI gave -0.61% in the month. The markets were hurt by the selling from FIIs, as they net sold Rs 20,620 crore in the cash market in August, even as DIIs prevented a slide by net buying for Rs. 25,017 crore.
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