In November 2024, over 260 funds clocked positive returns, and about 290 strategies beat Nifty50 TRI

November witnessed contrasting developments in the equity market and Portfolio Management Services (PMS) performance. Following the Nifty50's correction in October due to foreign investor selling and muted corporate earnings, November saw the market close lower for the second consecutive month. The Nifty50 TRI declined marginally by 0.26%, while the BSE500 TRI edged down 0.06%. Despite these challenges, PMS strategies showcased remarkable resilience, with 267 of 437 strategies delivering positive returns. Impressively, 290 PMS strategies outperformed the Nifty50 TRI, and 274 strategies exceeded the BSE500 TRI.

Among the top-performing PMS strategies, returns ranged from 5% to 8.5%, highlighting the adaptability of fund managers amidst challenging conditions. Stock market sectoral performance in November was mixed, with Technology (+7%), Capital Goods (+2%), Real Estate (+2%), Telecom (+2%), and PSU Banks (+1%) emerging as gainers. Conversely, Oil & Gas (-5%), Utilities (-4%), Metals (-3%), Healthcare (-2%), and Consumer (-2%) were laggards, reflecting the impact of moderated earnings and sustained FPI selling.

At the category level, Thematic strategies led the performance chart with an average return of 1.82%, followed by Small Cap (1.10%) and Small & Midcap (0.59%) offerings. Larger cap-oriented categories like Flexicap and Large & Midcap somewhat struggled, posting near-flat or negative returns. Importantly though, many PMS strategies proved their mettle once again, navigating a mixed market environment with expertise and agility.

Top 10 PMS Strategies of November 2024

In a challenging month where broader markets closed in the red for the second consecutive time, top-performing PMS strategies showcased their ability to generate positive returns and significant alpha. While the benchmark indices, Nifty50 TRI and BSE500 TRI, declined by 0.26% and 0.06%, respectively, the top 10 PMS strategies delivered stellar returns ranging from 5.06% to 8.54%.

Leading the pack was Valcreate Investment Managers' IME Digital Disruption thematic strategy, which delivered an impressive 8.54% return. This strategy appears to have capitalised on technology-driven growth opportunities, outperforming both benchmarks by a wide margin. Close behind was Narnolia Financial Services' Fusion Opportunity, a multi-cap strategy, with an 8.46% return, demonstrating resilience through a diversified portfolio.

InCred Asset Management's healthcare-focussed strategies secured two spots in the top 10. The Incred Focused Healthcare Portfolio ranked third with a 7.58% return, while the Healthcare Portfolio (ranked 5th) delivered 5.88%, highlighting the defensive sector's strong performance in November.

Flexicap strategy, India Long Term Fund by Thinqwise Wealth Managers stood out with a 6.58% gain (4th rank), showcasing adaptability across market caps. 

Meanwhile, Right Horizons’ Super Value Aggressive and Carnelian Asset Management’s Shift Strategy leveraged small and midcap opportunities, posting returns of 5.84% and 5.36%, respectively.

These top strategies underscore the expertise of PMS fund managers in identifying opportunities even in volatile markets, delivering robust returns and creating significant value for investors.

The performance of the top 10 strategies and their comparison with Nifty50 TRI and BSE500 TRI for the month are given below.

Category-wise Performance of PMS players

November brought a mixed bag for PMS strategies, with many categories delivering positive average returns despite challenging market conditions. Among the top performers, Thematic strategies led the way with an average return of 1.82%, driven by focussed investment themes that outperformed broader benchmarks. Small Cap strategies followed with a 1.10% average return, while Small & Midcap PMSes posted 0.59%.

Midcap and Multicap strategies both delivered 0.40%, demonstrating resilience across market caps. Large Cap PMSes, while subdued, managed a positive 0.16% average return, narrowly outperforming Flexicap strategies, which came in at 0.13%. On the flip side, Large & Midcap strategies dipped slightly into the red with a -0.10% return, while Multi Asset strategies were the weakest performers, with an average return of -0.55%.

The correction in Indian markets since September, driven by global uncertainties and FII outflows, has eased large-cap valuations but left midcaps and smallcaps trading at historically expensive multiples.

The performance of the categories is depicted below in the chart.

Thematic category

The Thematic PMS category stood out in November with an impressive average return of 1.82%, despite broader market challenges. This category, comprising 19 tracked strategies, demonstrated the resilience of thematic investing. In particular, focussed strategies targeting growth sectors like healthcare and technology fared well, outpacing the declines of the Nifty50 TRI and BSE 500 TRI.

As mentioned earlier, Valcreate Investment Managers’ IME Digital Disruption led the category with a remarkable 8.54% return, capitalising on digital transformation themes. Close behind was InCred Asset Management’s Incred Focused Healthcare Portfolio, which posted a solid 7.58% return, benefiting from the healthcare sector's strong performance in November. The same house’s Healthcare Portfolio delivered 5.88% solid return too, notching up the 3rd spot.

Other top performers included Green Portfolio's Dividend Yield (4.20%) and White Oak Capital Management’s Digital Leaders (3.60%), both of which thrived by focussing on specific market niches with high growth potential. Even though many thematic strategies faced volatility, their ability to leverage sector-specific opportunities and themes ensured robust performance.

Thematic PMSes have been effective in navigating turbulent markets by targeting sectors with strong long-term prospects, such as healthcare and technology, thus protecting and growing investor wealth despite broader market pull-backs.

Top 3 PMS approaches: Thematic category

Small Cap category

In November 2024, the Small Cap PMS category, with 24 tracked offerings, posted an average return of 1.10%, outperforming both the BSE 500 TRI and Nifty 50 TRI. Despite the broader market's downturn, Small Cap PMS strategies showed resilience, with 16 schemes beating BSE 500 TRI and 17 outperforming Nifty 50 TRI.

The top performer in this category was Right Horizons' Super Value Aggressive, delivering a robust return of 5.84%, followed closely by Fort Capital Investment Advisory's Value Fund at 4.12%. Counter Cyclical Investments' Diversified Long Term Value and Molecule Ventures' Growth also posted strong returns of 3.43% and 3.32%, respectively.

In total, several strategies, including Jama Wealth Asset Management's Maxiom PMS - SPARK (2.96%) and Equitree Capital Advisors' Emerging Opportunities (1.90%), outperformed the market. Notably, even the lower-performing schemes in the category showed minimal losses, highlighting the effective risk management and strategic stock selection by these PMS managers.

The performance data underscores the success of small-cap PMS strategies in navigating a challenging market environment, driven by their focus on high-growth potential companies with specific sectoral advantages.

Top 3 PMS approaches: Small Cap category

Small & Mid Cap category

The Small & Mid Cap PMS category, with 42 tracked schemes, posted an average return of 0.59% in November, outperforming both BSE 500 TRI and Nifty 50 TRI. The category showed notable resilience, with 25 schemes outperforming BSE 500 TRI and 26 outperforming Nifty 50 TRI.

The top performers in this category included Carnelian Asset Management’s Shift Strategy, which led with a return of 5.36%, followed closely by Wallfort PMS’ India Contra Equity Fund at 5.27%. Other strong performers included Electrum Portfolio Managers’ Laureate Portfolio (4.50%) and Wallfort PMS’ Avenue Fund (4.28%).

Several other strategies, such as InCred Asset Management’s Small and Midcap (3.75%) and Magadh Capital Advisors’ Future Stars (3.24%), also delivered solid returns. 

While some schemes faced losses, the overall performance indicated a positive trend within the Small & Mid Cap space.

Top 3 PMS approaches: Small & Mid Cap category

Mid Cap category

For November 2024, the Mid Cap PMS category, with 24 tracked schemes, generated an average return of 0.40%. This performance surpassed both BSE 500 TRI (-0.06%) and Nifty 50 TRI (-0.26%), with 16 schemes outperforming the BSE 500 TRI and, again, 16 outperforming the Nifty 50 TRI.

The top-performing schemes in the Mid Cap category included Purnartha Investment Advisers’ Dynamic Midcap Strategy, which led with a return of 3.12%, followed by Emkay Investment Managers’ Pearls at 2.74%. Nippon Life India Asset Management’s Emerging India also delivered strong returns of 2.70%.

Other notable performers included Unifi Capital’s Insider Shadow (1.84%), Sundaram Alternate Assets’ SELF Portfolio (1.39%), and Abans Investment Managers’ Smart Beta Portfolio (1.14%).

Despite the positive returns from several schemes, some faced challenges. Nevertheless, the category showed overall resilience in a fluctuating market.

Top 3 PMS approaches: Mid Cap category

Multi Cap category

The Multi Cap PMS category, with 182 tracked offerings, delivered an average return of 0.40% in November 2024, outperforming both the Nifty 50 TRI (-0.26%) and BSE 500 TRI (-0.06%). Among these, 105 schemes outperformed the BSE 500 TRI, and 116 schemes surpassed the Nifty 50 TRI, showcasing the category's strong performance in a challenging market.

Narnolia Financial Services’ Fusion Opportunity emerged as the top performer in the Multi Cap segment, with an impressive return of 8.46%. Other notable strategies included CapGrow Capital Advisors’ Special Situations (5.78%), Right Horizons’ Perennial (5.06%), and Sundaram Alternate Assets’ VOYAGER (4.33%).

The Multi Cap segment's success can be attributed to its diversified approach, enabling PMS managers to invest across market capitalisations. This flexibility likely helped them capitalise on opportunities in mid and small-cap stocks while maintaining stability through large-cap exposure. Additionally, skilled stock selection and strategic allocations further bolstered returns, even amidst volatile market conditions.

Top 3 PMS approaches: Multi Cap category

Large Cap category

The Large Cap PMS category, with 27 tracked offerings, delivered an average return of 0.16% in November 2024, outpacing both the Nifty 50 TRI (-0.26%) and BSE 500 TRI (-0.06%). This indicates the category's ability to weather challenging market conditions while maintaining stability.

Narnolia Financial Services’ Large Cap Strategy led the pack, delivering a return of 2.91%. Other standout performers included Renaissance Investment Managers’ Opportunities Portfolio (2.05%), JM Financial Services’ Growth and Value (1.72%), and Centrum PMS’ Built To Last (1.62%).

Large Cap PMS strategies generally benefit from investing in established, blue-chip companies that offer steady growth and resilience in volatile markets. Skilled portfolio managers in this category likely leveraged market opportunities to balance risk and return effectively, showcasing their ability to generate consistent performance. The focus on quality stocks, combined with strategic asset allocation, may have ensured that Large Cap PMSes delivered competitive returns despite broader market headwinds.

Top 3 PMS approaches: Large Cap category

Flexi Cap category

The Flexi Cap PMS category, comprising 63 strategies, posted an average return of 0.13% in November 2024, edging past the Nifty 50 TRI (-0.26%) and BSE 500 TRI (-0.06%). The performance of the best performing Flexi Cap PMSes highlights the category's adaptability across market caps to deliver stability in a challenging environment. Thinqwise Wealth Managers’ India Long Term Fund led the category with an impressive return of 6.58%. Other notable performers included Tamohara Investment Managers’ TRUFFLE (2.94%), Ckredence Wealth Management’s Business Cycle Fund (2.65%), and ICE Growth (2.61%).

Flexi Cap PMS strategies thrive on their ability to dynamically allocate investments across large-cap, mid-cap, and small-cap stocks, optimizing growth and risk. Managers in this category appear to have identified sector-specific opportunities and balanced portfolios effectively, ensuring resilience amidst market fluctuations. Their flexible approach has proven valuable in capturing diverse opportunities while mitigating risks, making Flexi Cap PMS an attractive choice for investors seeking broad exposure.

Top 3 PMS approaches: Flexi Cap category

Large & Mid Cap category

The Large & Mid Cap PMS category, comprising 18 tracked schemes, recorded an average return of -0.10% in November 2024.  The category average was pulled down by weaker-performing schemes.

Some strategies delivered notable outperformance. Dynamic Equities' Bluechip strategy emerged as the top performer, with a robust return of 2.74%. This was followed by Smart Alpha 250 from Alchemy Capital Management and Aegis by Bonanza Portfolio Ltd, generating returns of 1.25% and 1.24%, respectively. Valcreate Investment Managers’ IME Concentrated Microtrends and Ladderup Wealth Management's Proud PMS also performed well, posting gains of 0.98% and 0.88%, respectively.

In summary, the category exhibited mixed results, with select strategies standing out due to strong stock selection and tactical allocation.

Top 3 PMS approaches: Large & Mid Cap category

Multi Asset category

The Multi Asset PMS category, consisting of 18 tracked schemes, delivered an average return of -0.55% in November 2024. This performance lagged behind key indices such as NSE Multi Asset Index 1 and NSE Multi Asset Index 2, which returned 0.13% and 0.07%, respectively.

Among the top-performing strategies, ACE - Regular Income by Asit C Mehta Investment Intermediates Ltd led the pack with a return of 1.91%. Smart Alpha from Pace Financial Investment Adviser Pvt Ltd and UpperCrust Growth Fund by Moat Financial Services Pvt Ltd followed, posting gains of 1.46% and 0.98%, respectively. Shree Wealth Builder Plan from Shree Rama Managers LLP also delivered a return of 0.92%.

Despite a challenging month, top-performing strategies demonstrated resilience through diverse asset allocation and tactical moves in volatile markets.

Top 3 PMS approaches: Multi Asset category

Bottom Line

The Indian stock markets corrected by around 8% between September and November 2024, influenced by a mix of domestic and global challenges. Earnings moderation, elevated valuations in mid-cap and small-cap segments, and a fragile geopolitical environment in the Middle East, along with a strengthening dollar index post the Trump victory, weighed on market sentiment. Foreign institutions pulled out equities worth approximately USD 13 billion during this period, reflecting cautious investor behaviour.

However, this correction has brought some valuation comfort in large-cap stocks, with the Nifty-50 now trading at 19.5x FY26E EPS. While mid-cap and small-cap indices remain at relatively high multiples, they have cooled off from their September highs.

For long-term PMS investors, these phases of market volatility offer an opportunity to reassess portfolios and focus on quality investments. India's long-term growth story, underpinned by structural reforms, a young workforce, and digital transformation, remains intact. 

Staying invested with a long-term perspective often rewards patience and conviction, even during challenging times.