Over 340 strategies outperformed Nifty50 TRI and more than 170 clocked positive returns, showcasing resilience despite challenging market conditions

December 2024, the last month of the calendar year, was marked by contrasting narratives in the equity market and Portfolio Management Services (PMS) performance. While key indices extended their losses, a majority of the 430+ PMS strategies tracked by PMSBazaar displayed remarkable resilience, with a big majority outperforming benchmark indices (Nifty50: 340; S&P BSE500: 293)

The Nifty50 TRI fell by 2.02% in December, while the broader benchmark, S&P BSE500 TRI dropped by 1.50%. Indices such as the Nifty50 Hybrid Composite Debt 50:50 Index and NSE Multi Asset Index also closed lower, down 0.74% and 0.64%, respectively, pulling down equity components. The last 3 months have been challenging for equities, with indices sliding about 8% in this period.

PMS performance

Out of the 434 PMS strategies tracked, 173 delivered positive returns in December. Notably, 340 strategies outperformed the Nifty50 TRI (-2.02%), and 293 strategies exceeded the S&P BSE500 TRI (-1.50%).

Top-performing PMS strategies delivered returns ranging from 4.34% to 7.20%, with many smallcap strategies leading the pack. Equitree Capital Advisors’ Emerging Opportunities strategy topped the list with a 7.20% return, followed closely by Bonanza Portfolio’s Aegis and Dynamic Equities’ Bluechip strategies, which returned 7.10% and 6.17%, respectively.

Top 10 PMS Strategies (December 2024)

Equitree Capital Advisors’ssmall cap offering Emerging Opportunities delivered nearly 10 percentage points alpha in Dec-2024 with 7.2% return. Its philosophy is to invest in 12-15 undervalued, high-growth small & micro cap companies with long-term potential. The PIPE-inspired flagship offering of Equitree, launched in 2017, eyes minority stakes, seeks to actively partner companies, and holds for significant returns.

In the 2nd rank this month was Bonanza Portfolio’s Aegis with 7.1% return, delivering significant alpha. The multi cap offering, with a good dose of tactical and momentum based picks, aims to identify and invest in business ideas having strong potential to outperform the market and its peers by virtue of inherent fundamental and technical strength.

Dynamic Equities’ Bluechip PMS offering was ranked 3rd overall by the dint of its large & midcap strategy clocking 6.17% return in Dec-2024. Its investment objective is to create long-term wealth by investing in a portfolio of quality stocks with good valuations and generate alpha in both rising and falling markets, with focus on quality large and mid cap stocks characterized by high sales and profit growth, and low valuations.

The Performance of the top 10 Strategies and their Comparison with Nifty50 TRI and BSE500 TRI for the month are given below.

Category-Wise Monthly Performance of PMS Players

December 2024 brought mixed fortunes for PMS strategies across categories, with the majority facing headwinds from subdued market conditions. While a few categories managed to deliver positive average returns, the broader environment challenged fund managers as largecap and multicap oriented strategies lagged behind others.

As mentioned before, Smallcap strategies emerged as the top-performing category, with an average return of 0.77%, supported by selective stock-picking in resilient growth sectors. Small & Midcap strategies followed, albeit marginally, with a 0.05% return, reflecting the relative resilience of midcaps amidst a broader market correction.

Other categories, such as Multicap (-0.28%), Midcap (-0.59%), and Large & Midcap (-0.64%), struggled to generate positive returns, highlighting the impact of broader market weakness. Meanwhile, Multi Asset (-0.84%), Flexicap (-0.89%), and Thematic (-0.90%) categories faced sharper declines, indicating potentially temporary challenges in diversified and theme-based approaches.

At the bottom of the spectrum, Large cap strategies recorded an average return of -1.27%, reflecting the pressure on bluechip companies due to global macroeconomic uncertainties and sector-specific challenges.

The correction in the Indian markets highlights how the broader market remains under pressure following an exceptional run in 2023 and early 2024. Midcaps and small caps, while historically more expensive, demonstrated some resilience, as seen in the category-level performance.

PMS Category-Wise Returns for December 2024

Key observations

• Smallcap strategies benefited from exposure to high-growth sectors, showcasing their potential in a challenging environment.
• Largecap oriented strategies bore the brunt of macroeconomic concerns, including FPI outflows in the second half of December and subdued earnings growth expectations for key sectors.
• Thematic and multi-asset strategies, which typically thrive on diversified approaches, faced some challenges due to volatility across asset classes and sectors.

The current market correction, driven by global uncertainties and slowing domestic earnings growth, has brought largecap valuations to more reasonable levels. However, midcaps and small caps continue to trade at historically expensive multiples, potentially warranting some caution.

Smallcap category: Stellar Month Amidst Market Challenges

In December 2024, the smallcap PMS category emerged as the best-performing segment among all PMS categories, delivering an impressive average return of 0.77%. This performance stood out in stark contrast to the broader market's decline.

Of the 25 tracked schemes, an overwhelming majority of 21 strategies (84%) outperformed both the BSE 500 TRI and Nifty 50 TRI, showcasing the resilience of smallcap focussed portfolios amid challenging market conditions. These strategies capitalised on high-growth potential stocks, underpinned by robust fundamentals and selective sectoral tailwinds.

The top-performing PMS in this category was Equitree Capital Advisors’ Emerging Opportunities, which delivered a stellar return of 7.20%. Following closely were Alchemy Capital Management's Smart Alpha Small and Micro Cap and Dynamic Equities’ Smallcap, with returns of 4.94% and 4.34%, respectively.

The consistent outperformance of these schemes underscores the efficacy of active fund management and the ability of small-cap focussed PMS managers to identify promising investment opportunities even in a volatile market.

Below are the top-performing schemes in the smallcap category for December 2024.

The smallcap PMS category's robust performance amid market turbulence reflects its ability to generate alpha and deliver substantial value to investors. With a combination of disciplined stock selection and strategic risk management, these schemes have proven their mettle as a go-to option for investors seeking higher growth potential in their portfolios.

Small & Midcap category: Navigating Market Challenges with Precision

In December 2024, the Small & Midcap PMS category demonstrated resilience, posting a modest average return of 0.05%, outperforming the loss-making broader market indices significantly. 

Out of the 37 tracked schemes in this category, 25 offerings (68%) outperformed both the BSE 500 TRI and Nifty 50 TRI. This performance highlights the adept stock selection and risk management by PMS managers within the Small & Midcap space, even amid challenging market conditions.

The top-performing PMS strategy in this category was Badjate Stock Shares' Aggressive, delivering a solid return of 4.29%. This was followed by Magadh Capital Advisors’ Future Stars, which posted a return of 3.86%, and Trivantage Capital Management India’s Small and Midcap Financials, which registered 3.57%.

Several other strategies delivered positive returns, further reinforcing the category's ability to weather market volatility. The focus on mid-sized companies with growth potential and a well-diversified portfolio helped mitigate losses and achieve benchmark-beating performance.

Below are the top-performing schemes in the small & midcap category for December 2024:

The small & midcap PMS category continues to stand out for its focus on quality growth companies, disciplined approach, and agility in navigating uncertain market environments. Despite a challenging month for the broader indices, the category demonstrated its ability to deliver value to investors.

Multicap category: A Resilient Performer in a Challenging Market

The multicap PMS category, consisting of 180 tracked offerings, posted an average return of -0.28% in December 2024. Despite a slightly negative return, it emerged as the third-best performing category of the month, benefiting from its diversified approach. The category significantly outperformed broader market indices, with the BSE 500 TRI and Nifty 50 TRI recording declines of 1.50% and 2.02%, respectively.

An impressive 125 schemes (69%) outperformed the BSE 500 TRI, while 142 schemes (79%) surpassed the Nifty 50 TRI, showcasing the robustness of this segment despite the broader market downturn.

The top-performing strategy in the multicap category was Bonanza Portfolio’s Aegis, which delivered a stellar return of 7.10%. This was closely followed by Bonanza Portfolio’s Multicap, which posted a return of 6.01%, and Capitalmind Financial Services’ Adaptive Momentum, which recorded a return of 5.35%.

The multicap category's flexibility to invest across market capitalisations continued to be its defining strength. This allowed PMS managers to identify and capitalize on growth opportunities across large, mid, and small-cap segments, enabling strong relative performance even in a challenging environment. Furthermore, the category’s broad portfolio composition possibly helped mitigate risks and capture upside potential in select high-growth sectors.

Below are the top-performing schemes in the multicap category for December 2024:

The multicap PMS segment’s ability to adapt and thrive in varying market conditions reaffirms its position as a versatile and resilient choice for investors. Despite market volatility, it continues to attract investor confidence with its balanced approach to portfolio construction and strategic asset allocation.

Midcap category: Navigating a Tough Month

In December 2024, the midcap PMS category, with 24 tracked schemes, recorded an average return of -0.59%, reflecting the challenges of the broader market downturn. 

Despite this, the category showcased relative resilience by outperforming the BSE 500 TRI (-1.50%) and Nifty 50 TRI (-2.02%). Notably, 15 schemes (63%) outperformed the BSE 500 TRI, while 20 schemes (83%) outperformed the Nifty 50 TRI.

The top performers in the category included NAFA Asset Managers’ Clean Tech Portfolio, which delivered a return of 3.28%, followed by Right Horizons’ Super Value at 3.05%, and Sundaram Alternate Assets’ SELF Portfolio, which posted a return of 2.14%.

Below are the top-performing schemes in the midcap category for December 2024:

While the overall category returns were in the red, these top-performing schemes demonstrated the ability to generate positive results even in a challenging market environment. The midcap PMS category’s adaptability and focus on growth-oriented stocks have helped it mitigate the impact of broader market volatility.

Large & Midcap category: Select Outperformance Amid Volatility

The Large & Midcap PMS category, with 18 tracked schemes, recorded an average return of -0.64% in December 2024. While the category faced headwinds, it outperformed the broader indices, with 10 schemes (56%) exceeding the performance of the BSE 500 TRI (-1.50%) and 11 schemes (61%) surpassing the Nifty 50 TRI (-2.02%).

The top performer in this category was Dynamic Equities’ Bluechip Strategy, delivering a strong 6.17% return, showcasing its resilience in a difficult market. 

Alchemy Capital Management’s Smart Alpha 250 followed with a return of 3.21%, and Bonanza Portfolio’s Growth Strategy rounded out the top three at 1.44%.

Below are the top-performing schemes in the large & midcap category for December 2024:

Despite the overall negative performance, the ability of select strategies to outperform benchmarks highlights the potential of this category in navigating challenging market environments.

Multi Asset PMS category: Returns Challenge In A Demanding Month

The multi asset PMS category, comprising 20 tracked schemes, recorded an average return of -0.84% in December 2024. While the category experienced negative returns, it demonstrated resilience by outperforming key benchmarks. 

Notably, 85% of the schemes (17 out of 20) outperformed the BSE 500 TRI (-1.50%), Nifty 50 TRI (-2.02%), highlighting the effectiveness of the multi-asset approach in mitigating downside risks.

Leading the category was Elever Investment Advisers’ Factorincome PMS, which delivered a positive return of 0.78%, demonstrating superior risk-adjusted performance. 

This was followed by Prabhudas Lilladher’s Multi Asset Dynamic Portfolio Alpha and Shree Rama Managers’ Shree Wealth Builder Plan, both posting returns of 0.56%.

Below are the top-performing schemes in the multi asset category for December 2024:

The ability of 9 out of 20 schemes to outperform the NSE Multi Asset Index 1 (-0.64%) also underscores the strategic advantage of this category in navigating volatile markets. By balancing exposure across equity, debt, and other asset classes, Multi asset PMS strategies offered relative stability in a challenging December.

Flexicap PMS Performance: Resilience in Pockets Amid A Weak Month

In December 2024, the Flexicap PMS category delivered a relatively strong performance despite the challenges faced by the broader market. 

The average return for the 64 schemes in this category stood at -0.89%, while the BSE 500 TRI and Nifty 50 TRI reported returns of -1.50% and -2.02%, respectively. This reflects the ability of many schemes within the flexicap category to outperform key market benchmarks.

Notably, 42 schemes (65%) in the flexicap category outperformed the BSE 500 TRI, and 49 schemes (76%) outperformed the Nifty 50 TRI, demonstrating the effectiveness of their investment strategies in a volatile market environment.

Below are the top-performing schemes in the flexicap category for December 2024:

These schemes illustrate the potential for positive returns even when market indices are in negative territory. The flexicap PMS category’s ability to consistently outperform major benchmarks highlights its strength in navigating market fluctuations effectively.

Thematic PMS Performance: Handling Market Challenges 

The Thematic PMS category faced a challenging environment in December 2024, with an average return of -0.90%. In comparison, the BSE 500 TRI delivered a return of -1.50%, and the Nifty 50 TRI fell by -2.02%. Despite the negative market performance, 9 schemes (47%) outperformed the BSE 500 TRI, and 12 schemes (63%) outperformed the Nifty 50 TRI, demonstrating the potential of thematic strategies to perform well even when broader market indices were under pressure.

Thematic investing, which focuses on sector-specific opportunities, continues to provide avenues for growth, even amidst volatility. Strategies that targeted sectors like digital transformation, ethical investing, and dynamic high-growth sectors performed relatively better during the month.

Green Portfolio’s Super 30 Dynamic Fund led the category with a 4.50% return, benefiting from its dynamic, high-growth sector approach. Valcreate Investment Managers’ IME Digital Disruption Fund posted a solid 4.34% return, capitalising on the digital transformation theme. Again, Green Portfolio’s The Green Ethical Fund delivered a 1.78% return, continuing to attract attention due to its focus on ethical investing.

Below are the top-performing schemes in the thematic category for December 2024:

In summary, despite the overall negative returns for the month, thematic PMS strategies demonstrated their ability to capture growth in specific sectors, with several schemes outperforming key benchmarks. This highlights the effectiveness of thematic investing in providing investors with opportunities that align with high-growth trends and sector-specific themes.

Largecap PMS Performance: Striving For Outperformance

The Largecap PMS category showed positive resilience in December 2024, with an average return of -1.27%, outperforming the broader market indices. The BSE 500 TRI posted a return of -1.50%, while the Nifty 50 TRI experienced a larger decline of 2.02%. Despite the challenging market conditions, 13 schemes (48%) outperformed the BSE 500 TRI, and 17 schemes (63%) outperformed the Nifty 50 TRI, demonstrating the robustness of such strategies in managing market volatility.

The top-performing schemes in the largecap category focussed on growth, value, and long-term compounding strategies, which proved to be effective in navigating the downturn. JM Financial Services’ Growth and Value strategy led the pack with an impressive 3.43% return, benefiting from its balanced approach to growth and value stocks. Ambit Global Private Client’s Caliber strategy posted a 1.21% return, leveraging strong fundamentals in its selected large-cap stocks. Capitalmind Financial Services’ Market Fund recorded a 1.08% return, showing the effectiveness of its market-driven approach.

These top performers highlight the potential for large-cap strategies to deliver positive returns in a challenging market environment by focusing on quality, long-term investments.

Below are the top-performing schemes in the largecap category for December 2024:

These schemes and others exemplify the strength of largecap PMS strategies in capturing opportunities within established companies, ensuring a more stable return profile compared to broader market indices. Despite the overall negative returns for December, several largecap PMS strategies succeeded in delivering solid outperformance.

Conclusion

While December 2024 was a challenging month for the markets, it highlighted the inherent volatility that investors face from time to time. The correction in the broader market, combined with sector-specific pressures, served as a reminder of the importance of maintaining a disciplined investment approach. However, this period of market stress provides valuable opportunities to reassess portfolios, especially in quality investments that have the potential to weather such turbulence.

While short-term fluctuations can test investor resolve, the long-term growth prospects for India remain compelling. For PMS investors, the key lies in maintaining a long-term perspective, focusing on robust, resilient strategies that can navigate through market cycles. Staying patient and invested during times of market uncertainty often rewards those who remain committed to their investment objectives.