PMSes delivered a strong performance for June, with the PMS small-cap category delivering a whopping 11.09% return for June.

Along with Small Cap, the Small & Mid Category in PMSes too reported strong performance at 9.88%, our data shows.  

What has helped? While the Indian equities indices plunged on account of surprising election results in June, the market soon recovered, thanks to the formation of the new government, ensuring continuity. This political stability, along with positive economic data and strong investor flows, fueled a rally across the market caps. The S&P BSE Sensex and Nifty 50 ended up 7% and 6.6% respectively, and mid and small-cap indices also gained, up 8% and 10% respectively. Market capitalisation reached US$5 trillion, with the last trillion added in just six months. Beyond politics, multiple factors including higher GDP growth, declining inflation trends and a lower fiscal deficit boosted investor confidence, which remained strong despite global headwinds. The market now looks to upcoming corporate earnings reports.

The optimistic mood was reflected in the PMSes performance as well. Let us understand this category's performance better. 

Category PMS performance

With June being a month of sustained upward momentum, small and mid cap categories outperformed large cap, predominantly driven by the institutions, both FIIs and DIIs. As such, the overall portfolio was titled towards relatively higher risk and reaped higher rewards. 

Within the PMS Bazaar universe, small cap, small & mid cap and mid cap categories were topping the charts. Out of 403 PMS Investment Approaches, 20% of them are under these categories. About 84% of the PMS investment approaches have beaten their respective benchmark indices for June 2024. 

Small cap category 

As mentioned, small-cap stocks were the stars of June, with the category generating an impressive return of 11.09%. This outperformed the broader market, as reflected by the BSE 500 TRI (7.05%) and Nifty 50 TRI (6.77%).  Nearly all (23 out of 24) small-cap PMS schemes tracked surpassed these benchmark indices, demonstrating their ability to deliver alpha (excess return) for investors.

While the Nifty Small 250 TRI is not a benchmark, it is taken to show that in June, the small-cap PMSes have beaten this index too. 

Here are the PMSes that have topped the charts in June 2024: 

This category for June has higher weightage towards sectors such as financial services, healthcare, capital goods, chemicals and automobiles. 

The top 5 stocks that have helped in the strong performance of the small-cap category are: 

Mid Cap Category 

June 2024 data reveals a robust performance for mid-cap PMSe as well. These strategies achieved an average return of 8.86%, highlighting their capacity for generating significant returns.  

What’s more, 20 out of 27 outperformed the market benchmark indices, the BSE 500 TRI (7.05%) and the Nifty 50 TRI (6.77%). This superior performance suggests that mid-cap PMS managers effectively identified and capitalised on investment opportunities within the mid-cap segment. The top sectors under this category that have helped deliver such performance include financial services, capital goods, automobiles, healthcare and information technology. 

While the Nifty Mid Cap 150 TRI is not a benchmark, it is taken to show that in June, the Mid Cap PMSes have beaten this index too. 

Here are the PMSes that have topped the charts in June 2024: 

This category for June has higher weightage towards sectors such as financial services, capital goods, and automobiles. 

The top 5 stocks that have helped in the strong performance of the small-cap category are: 

Small & Midcap category 

Taking into account how the small and mid-cap categories have performed, the small & mid cap segment too have delivered a noteworthy performance. 29 of the 30 approaches outperformed the 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 the BSE 500 TRI, the outperformance hit rate is still markedly high at nearly 87%. 

While the Nifty Small-Mid 400 TRI is not a benchmark, it is taken to show that in June, the Small & Mid Cap PMSes have beaten this index too. 

Here are the PMSes that have topped the charts in June 2024: 

What’s next for this category?

The Indian stock market indexes, Sensex and Nifty 50 fell a little over 2% during the budget announcement of proposed tax hikes on stock market gains. However, the indices soon recovered. While in the short term markets could be volatile, it is unlikely to impact the overall market outlook. This would mean an optimistic outlook on PMS performance as well.  That said, investors are recommended to consult their financial advisors for better investment strategies.

Disclaimer: The above stocks, sectors and PMSes mentioned are for informational purposes only and not to be construed as recommendations.