The top performers’ list in the month includes small cap, mid cap, and small & midcap strategies as optimistic market sentiment boosted gains
After the temporary brouhaha over Lok Sabha election results, the domestic equity market resumed its upward journey in June. After consolidating in May’24, Nifty 50 touched a fresh high before ending 6.77% up MoM (month on month) in June. Mid Cap and Small Cap stocks generally outperformed large caps this month, indicating that risk-on sentiment is back.
The 7.47% average return notched up by the over 400 Portfolio Management Service (PMS) approaches tracked by PMS Bazaar handily beat Nifty 50 TRI benchmark's 6.77% up move and BSE 500 TRI’s 7.05% gain. The alpha charge was led by Small Cap (11.09%), Small & Midcap (9.88%), Mid Cap (8.86%), Thematic (7.91%), and Multi Cap PMSes (7.59%). On the other end of the spectrum, Large & Mid Cap (6.29%) and Large Cap (5.96%) PMS approaches delivered positive performances.
Overall, out of 403 PMS approaches, 61% of them have beaten the Nifty 50 TRI and thus maintain the winning trend. If you benchmark it with BSE 500 TRI, then too a respectable 55% outshined. The top-10 PMS performers’ list in June was dominated by approaches from small cap (4), followed by multi cap (3), small & mid cap, mid cap and flexi cap (1 each), as portfolios positioned towards higher risk paid richer dividends.
Top 10 PMS Strategies of June 2024
The top 10 schemes delivered strong performances in June compared to the equity benchmark index – Nifty 50 TRI (6.77%). In fact, the top 10 winning approaches clocked 14-24% returns in June, thus generating 700-1700 basis points of alpha over Nifty 50.
The performance of the top 10 strategies for the month are:
Hem Securities' India Rising SME Stars emerged as the best-performing PMS in June, with the approach delivering 23.81% returns. The key objective of this small cap PMS is to bet on high-growth SME and small cap (listed, long-only) opportunities with conviction.
The second best-performing PMS in June was Money Grow Asset's Small Midcap approach with a 19.22% return. The only small & midcap among the top-10 this month, this strategy is also among the youngest (6-month old) in the entire PMS universe.
Wallfort PMS and Advisory Services' mid cap offering, Diversified Fund was ranked 3rd best with 17.88% gain in June. Its investment approach centres around investing in companies that have strong tail winds for growth with diversification in all growing sectors, have a quality franchise and are available at a reasonable valuation.
The performance of the top 10 strategies and their comparison with Nifty 50 TRI for the month are given below.
Category-wise performance of PMS players
With June being a month of sustained upward momentum, mid caps and small caps outperformed largecaps, predominantly driven by the institutions. After being sellers in April and May, FIIs turned buyers of USD 3.1 billion in Jun’24. DIIs too pitched in, although less aggressively as in May. Overall, portfolios tilted towards relatively higher risk reaped higher rewards. Small Cap PMS approaches were the best, followed by Small & Midcap, and Midcap PMSes. Next in line were Thematic, and Multicap offerings.
The performance of the categories is depicted below in the chart.
Small cap category
June 2024 witnessed small cap category outperform the overall market, rising 11.09%. Out of 24 PMS schemes in this category, 23 outperformed BSE 500 TRI (7.05%) and Nifty 50 TRI (6.77%). So, almost all of the approaches in the category outdid markets and generated alpha for investors.
With a 23.81% gain in June, Hem Securities’ India Rising SME Stars clocked the best gains in the category, and as mentioned before, the overall best across the tracked PMS universe.
In second place was Equitree Capital Advisors’ Emerging Opportunities portfolio with a whopping 16.72% gain in June. This small and micro cap focussed approach targets firms under-researched by the markets and / or are under-owned by institutional investors, enabling it to capture some kind of 'discovery premium'.
Ranked 3rd in small cap PMS category is the nearly 8-year-old Equirus Wealth Long Horizon Fund with a 16.01% return in June.
Following are the top performers in small cap category:
The performance of the category in June with respect to the BSE 500 TRI and Nifty 50 TRI is depicted in the graph below.
Small & Midcap
June was a month of revival for this category, like many others, with 29 of the 30 approaches outperforming the broader market Nifty 50 TRI benchmark. All-round performance for the category resulted in an average return of 9.88%. If you compare this PMS approach returns with BSE 500 TRI, the outperformance hit rate is still markedly high at nearly 87%.
Leading the category in June is Money Grow Asset Small Midcap with a stunning 19.22% gain. This performance has also earned it the overall 2nd slot in the overall tracked PMS universe for the month as mentioned before.
In second place is Badjate Stock Shares Aggressive strategy with a 13.18% gain for the almost 3-year-old approach. The offering aims to generate higher alpha by investing in high beta stocks and the manager seeks to invest in stocks that have the capability of generating returns in the short-midterm horizon.
Cementing third place is the 12-year plus vintage offering from Care Portfolio Managers’ Growth Plus Value strategy with a 13.03% gain. It is in fact a few decimal points away from Badjate Shares Aggressive approach in terms of June returns. The very first offering from Care, Growth Plus Value follows a concentrated approach of betting on 15-20 stocks and the focus is on companies trading at low or reasonable valuations.
Following are the top performers in small and midcap categories:
Midcap
In June, the performance of 27 mid cap PMS approaches was strong, resulting in an average return of 8.86%. With a significant majority of approaches demonstrating notable performances, 20 of 27 outperformed both the BSE 500 TRI benchmark (7.05%) and the Nifty 50 TRI (6.77%) benchmark.
Among the best performers in June, Wallfort PMS and Advisory Services Diversified Fund stole the show with 17.88% gains. This performance has also landed it a place in the overall June top-10 wall of fame amongst 400+ PMS approaches by PMSBazaar.
In the second slot was NAFA Asset Managers Emerging Bluechip Portfolio with an attractive 13.85% return in June. The 25-40 stock approach seeks to achieve outperformance by investing in emerging market leaders and taking active sector, stock and cash calls.
The 3rd best mid cap PMS for June was Nuvama Asset Management’s Equities expansion Target approach with 13.00%, just 85 bps behind NAFA. The less than a year old mid cap PMS offering has a disciplined exit strategy i.e. locks profits at euphoric valuations.
Following are the top performers in the midcap category:
The performance of the category in June with respect to the BSE 500 TRI and Nifty 50 TRI is depicted in the graph below:
Large & Midcap
After remaining stable in volatile conditions in May, the Large & Mid Cap category performed decently in June, The category as a whole posted a 6.29% return, which though below benchmarks, continues its steady show. Out of 15 approaches assessed, 7 delivered strong performances and beat Nifty 50 TRI (6.77%).
Leading the pack was the Mansi Share and Stock Advisors’ Seven Islands PMS with a 10.30% gain. This is a one-and-a-half-year old offering from a PMS that prides itself in holding on to investments.
In second place was True Beacon Investment Advisors EqFactorQuant (EFQ) with an 8.21% return and closely following at 3rd place in the large & midcap category is Geojit Financial Services Freedom Portfolio with an 8.15% gain. A feature of True Beacon’s EFQ offering focuses on human biases that may creep in investing by applying fundamental data signals systematically to its BSE 500 stock universe. On the other hand, Geojit’s Freedom Portfolio prefers undervalued cap stocks with high growth potential.
Following are the top performers in the large & mid cap category:
Large cap
While Large & Mid Cap category offers a blend of stocks in both categories, the Large Cap PMS space is much more concentrated in a single m-cap band as the name suggests. In a month where risk-on sentiment prevailed, Large Cap PMS approaches performed but wasn’t an exceptional month.
Posting a category return of 5.96% for Jun’24, the Large Cap PMS universe on the whole did not beat Nifty 50 TRI (6.77%) but there were 8 notable performers that outshined. If you benchmark Large Cap PMSes with BSE 500 TRI (7.07%) gain in June, about 6 Large Cap approaches prevailed.
Standard Chartered Securities India’s Long Term Value Compounder came at the top of the table with a respectable 10.00% gain in June, earning it the 1st spot in this 24-approach category. Saurabh Mukherjea-led Marcellus Investment Managers’ Consistent Compounders was 2nd with an 8.48% return in June, followed closely by Right Horizons’ India Business Leader with a 7.91% return this month.
The top 3 performers under this category are:
The performance of the category in June with respect to the BSE 500 TRI and Nifty 50 TRI is depicted in the graph below.
Multicap
With a tilt towards mid cap and small cap stocks, multi cap PMS category achieved 7.59% returns in June and beat both BSE 500 TRI and Nifty 50 TRI. During volatile times, large caps shield but during risk-on periods, the mid and small cap bit of multi cap portfolios help lock in gains.
Out of 180 approaches (the highest across all categories), over 100 multi cap PMS offerings each outperformed both benchmark indices viz 114 beat Nifty 50 TRI and 105 beat BSE 500 TRI.
With a large number of schemes in this space, the fight for top-3 in June was a closely-contested one. The number 1 multi cap PMS offering is Bonanza Portfolio's Multicap with 14.79% gain.
It was closely followed by Anand Rathi Advisors' Impress PMS at 2nd rank clocking 14.01% gains in June. This approach prefers a 15-20 stock diversified portfolio across sectors with 70% to 80% allocation in mid and small caps and the balance 20-30% in large caps.
InCred Asset Management's Multicap Portfolio, which aims to invest in companies that have the potential and are at the inflection point of graduating to the next m-cap bucket, secured the 3rd rank in the category with a 13.95% rise.
Below is a table highlighting the top performers of multi cap category:
The performance of the category in June with respect to the BSE 500 TRI and Nifty 50 TRI is depicted in the graph below.
Thematic
The thematic category came in the 4th position in June among the niches tracked by PMSBazaar. With an average return of 7.91%, the varied category, which includes approaches focussed on digital, life sciences, lenders, MNCs etc, beat Nifty 50 TRI. Out of the 16 thematic PMS offerings, all the 16 beat posted positive returns. Overall, the outperformance hit-rate against Nifty 50 TRI was over 62% as ten offerings outshone the market.
Green Portfolio took home twin honour of grabbing the 1st and 2nd slots in thematic category. The Impact ESG Fund, which bets on stocks backed by companies that respect strong ESG pillars, delivered 10.56% gain in June. Its MNC Advantage approach --- which picks companies with successful international operations,ongoing R&D and capex programmes, access to global research, along with a strong market share in its industry --- clocked a similar 10.50% rise this month.
In the 3rd slot was Marcellus Investment Managers' Kings of Capital with 9.77% up move. This is a financials sector focused investment strategy with a portfolio banks, NBFCs, life and general insurers, asset managers and brokers.
Following are the top performers this month:
Bottom line
The near future of the stock market hinges on the first quarter earnings and the upcoming Union Budget. Earnings growth in the first quarter of the 2025 fiscal year is expected to be driven by domestic sectors like Auto and BFSI, with additional contributions from Healthcare and Metals. Conversely, global sectors like O&G, Cement, and Speciality Chemicals are likely to drag down earnings growth. Strong growth is anticipated in Real Estate and Retail, while Consumers and Technology should see moderate growth.
The new government's Union Budget will set the tone for the next five years, and their 100-day agenda will offer insights into their policy framework. It is anticipated that the government will leverage the increased RBI dividend to provide relief to lower and middle-income groups, stimulating consumption ahead of crucial state elections (October-November).
In the long run, India's unique blend of size and growth is promising. With the return of the Modi-led government, policy continuity is expected to further drive economic momentum. Infrastructure, capital expenditure, and manufacturing will be key areas of focus.
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