Consistent performance helps portfolio managers out-perform markets across various time periods, underlining the utility of PMS in a wealth portfolio

Successful investing is rarely about avoiding risk, it is actually more about managing risk. On that count, portfolio managers have done a great job in August 2020. While the broader markets showed volatility and ended up 2.8% for the month, beating the market was not a problem for over 74% PMSes. Short-term performance does have an effect on long-term periods as well. This is why we see that for the one year ended August 31, every three out of four PMSes outshine the Nifty. How did PMSes perform against their own category benchmarks? Read on to know more.

After domestic stock markets were hit by the speeding Covid-19, resilience and optimism have marked the performance ever since. Sidelining micro and macro worries, markets have galloped at a fast clip. April, May, June and July saw worries about coronavirus being shrugged off, as investors were prepared to sacrifice FY21 earnings. Stocks rallied. Near record highs now, markets have been showing a cautious stance. August exemplifies this sentiment in case of largecaps. As a result, the Nifty is up 2.8% in August 2020. The action seems to be shifting to the unloved portion of the market - midcaps (up 7.8%) and smallcaps (up 10.1%). As largecaps look tired, the activity is shifting down the cap-surve.

August In Review

Unlike previous months, August saw moderate returns for the broad market indices.

Largecap PMSes - Out of these 19 PMSes tracked by PMS Bazaar, the best performer was AcePro Advisors Largecap Strategy with 6.30% gain, followed by Varanium Capital Advisors Large Cap Focused Fund (up 4.20%) and Emkay Investment Managers Emkay's 12 (up 3.70%). The category average of 2.37% is lower than Nifty's 2.8%.

The smaller segment of Large & Midcap PMSes contains 3 tracked strategies. Emkay Lead PMS was the best one with 3.4% August gain.

Midcap PMSes - Out of these 16 PMSes tracked by PMS Bazaar, the best performer was Centrum Multibagger (Deep Value I) with 13.9% rise, followed by Centrum Deep Value IV (up 12.5%) and Phillip Capital Emerging India Portfolio (up 11.74%).Nifty Midcap 100 was up 7.8% in August, which means the Midcap PMS category monthly average at 8.11% was a winner.

There are 10 strategies categorized as Small & Midcap. Equirus Securities Long Horizon Fund topped this chart in August with 15.39%, followed by Kotak Small & Mid Cap (up 11.8%) and Valcreate Growing India (up 11.28%). The Small & Midcap PMS category average for August was 8.9%, driven by the fact that both midcap and smallcap stocks skyrocketed this month.

Multicap PMSes - This is the biggest category of strategies tracked by PMS Bazaar with as many as 101 funds. The best performer in August was Buoyant Capital Opportunities fund up 14.2% & Capgrow Capital Advisors Special Situations with 14.2% gain, followed by Karma Capital Advisors Long Only India Public Equity Fund with 12.7% gain , Moneylife MAS Growth (up 12.48%) and Globe Capital Value Portfolio (up 10.21%). The BSE 500, which is a multicap proxy, was up 3.8%. In comparison, multicap PMS category average was 4.79% up, showing outperformance. Multicap PMSes with tilt towards midcap and smallcap won big this month.

Smallcap PMSes - PMS Bazaar tracks 12 Smallcap PMS strategies. Negen Capital Small Cap Emerging was the best category as well as overall performer with a mind-blowing 25.13% boost in August, compared to BSE Small Cap index's 10.10% gain. The other notable performers in this segment include Centrum Micro (up 18.70%), Marcellus Little Champs (up 18%), Ambit Investment Advisors Emerging Giants (up 16.8) and Nine Rivers Aurum Small Cap Opp.(up 15.19%). The category average return in August was a whopping +13.64%.

Others - Among thematic & sector funds, Valcreate Life Sciences & Specialty Opp. was the numero uno with 9.89% rise in August.  ETFs tracked market closely with NJ Advisory Freedom ETF logging 3.39%. First Global Indian Multi Asset strategy up by 2.7%.

One-Year Show

A PMS strategy can do well in a month, but performance or even out-performance in longer time periods require discipline and focus.

Do note about 17 PMS strategies tracked by us don't have 12-month performance data. Hence, we cover 160 strategies in the 1-year period.

Largecap PMSes - Out of these 18 PMSes tracked by PMS Bazaar, the best performer was Pelican PE Fund with 16.23% gain, followed by AccuraCap Alpha10 (up 13.93%) and Varanium Capital Advisors Large Cap Focused Fund (up 11.60%). The category average of 3.79% is higher than Nifty's 3.3%, showing a majority of largecap PMSes delivered alpha.

The smaller segment of Large & Midcap PMSes contains 3 tracked strategies. Bonanza Growth was the best one with a solid 15.96% rise.

Midcap PMSes - Out of these 15 PMSes tracked by PMS Bazaar in 1 year time period, the best performer was Centrum Deep Value IV with 33.6% rise, followed by Centrum Multibagger Deep Value I (up 28.4%) and Phillip Capital Emerging India Portfolio (up 24.86%). The midcap PMS category average return in 1 year was 15.39% compared to Nifty Midcap 100 index's 6.6% gain, which shows a substantial portion of those strategies generated alpha.

There are 10 strategies categorized as Small & Midcap. Equirus Securities Long Horizon Fund topped this chart with 58.6% in 1 year, followed by Valcreate Growing India (up 36.28%) and Motilal Oswal IOP V2 (up 15.28%); The Small & Midcap PMS category average for 1 year was 12.77%.

Multicap PMSes - As many as 90 strategies are tracked with 1 year performance history. The best performers are separated by a few decimal points; Satco Capital Markets Growth & Momentum clocked 33.4% gain and Globe Capital Market Value strategy reported 33.21% return in 1 year period. Stallion Asset Core Fund is a close 3rd with 31.16% rise followed by Sameeksha Capital Equity Fund up 27%. The 1-year multicap PMS category average is 9.33%, which is more than double of BSE 500 index's 4.6% gain in the 1-year period.

Smallcap PMSes - PMS Bazaar tracks 11 Smallcap PMS strategies with a 1-year track record. Ambit Emerging Giants is the best category performer with a whopping 41.50% boost in 1 year period, compared to BSE Small Cap index's 14.4% gain. The other notable performers in this segment include Marcellus Little Champs (up 40.20%) and AccuraCap Picopower (up 34.81%). The category average return in 1 year period was 17.43%.

Others - Among thematic & sector funds, Valcreate Life Sciences & Specialty Opp. is the number 1 with a whopping 55.49% gain in 1 year period. Kotak Pharma is 2nd in line with 49.3% rise.