After three successive months of negative returns, the Nifty just about ended in positive territory in March. In a month characterized by bank failures in the US and Europe, and amidst fears of a contagion hurting the global economy, the Federal Reserve quickly stepped in to create a rescue package for the banks and calmed the nerves of depositors and investors.

The nifty recorded a 0.32% return during the month, while the broader market BSE 500 delivered 0.33%. The mid and small-cap indices ended in the red. Foreign portfolio investors (FPIs) made a net investment of Rs 7936 crore in equity during March 2023.

During the month, 91 of the 304 (or less than three in ten) PMS strategies delivered higher returns than the Nifty. On average, the PMS strategies gave -0.5% returns in March, even though the Nifty delivered marginally positive returns.

Given that gold has had a good run, multi-asset strategies put up a fine show during the month.

Top 10 PMS Strategies of March 2023

In the top 10 strategies list, multi-asset funds dominated the chart, with as many as five of the ten coming from the category during the month. A couple of multi-cap strategies did well, too.

The India Opportunities Product of Aequitas Investment Consultancy, which follows a blend of growth, contrarian, and value strategies topped the chart with 4.43% returns.

Next on the list was the large-cap strategy of Tulsian PMS, with 3.8% returns in March.

The next in the pack with a 3.34% return was the Prive 1 strategy of Pace Financial Investment, which invests in a mix of traditional and non-traditional asset classes to balance returns and risks.

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The returns of the top 10 PMS strategies in March 2023 and the Nifty, which is depicted by the bar line, are shown below.

Category-wise performance of PMS players

Given below is the chart showing the performance of the different strategies across market capitalization during March. The large & midcap segment was the best in the month, with 0.37% returns. Large-cap strategies managed 0.14% on average during March. All other strategies delivered negative returns for the month. Small caps were the worst performers, along with midcaps, with -1.56% and -1.55% returns during the month, respectively. The thematic strategy fell less at -0.32% during March 2023.

Small caps

The small-cap category did not experience a great month, with only 8 of the 18 strategies (four in ten) beating the BSE Small Cap return of -1.4%. 

First in the chart was Aequitas Investment Consultancy’s India Opportunities Product with 4.43% returns. This fund follows a mix of value, contrarian, and growth strategies and invests in small and microcaps. 

Next on the list was the PIPE strategy of ICICI Prudential, which involves investing in companies enjoying some economic moat and/or undergoing special situations or in the midst of an unfavorable business cycle, with 2.23% returns during March.

O3 Special Situations Portfolio of O3 Securities was third with a 1.62% return during the month. It invests in small caps where there is a visible business turnaround and high growth potential.

The performance of the category with respect to the BSE Small Cap is depicted in the graph below.

Small & Midcaps

Only nine of the 30 PMS strategies in the category delivered positive returns during the month. The small & midcap category gave -a 0.67% return in March.

The VRDDHI strategy of ithought Financial Consulting topped the charts with a 1.83% return in March.

Second on the list was the Future Stars strategy of Magadh Capital Advisors, which focuses on fast-growing and/or mispriced companies led by good management, with 1.7% returns.

QED Capital Advisors’ Alphabets strategy came third with a 1.52% return during the month. This strategy takes a rule-based approach to investing.

Midcap

Midcap strategies had a rough run in March, with only 6 of the 21 strategies going past the Nifty Midcap 100 return of -0.27%. The category delivered -a 1.55% return during the month.

The smart beta strategy of Abans Investment Managers, which focuses on an algorithm powered and rule-based model of the stock selection process, topped the list with 2.25% during the month.

Second in the sequence was the Mint strategy of Reliance Wealth Management, with 0.54% returns during the month.

The third in the list was the Pearls strategy of Emkay Investment Advisors, which follows a bargain hunting method of stock selection, with 0.52% returns.

How the midcap category fared against the benchmark index Nifty Midcap 100 in March is shown below.

Large and Midcap

The 11 large and midcap funds delivered 0.37% on average in March 2023. Eight of the 11 strategies gave positive returns during the month. 

LIC MF’s value equity strategy was the best in the category during the month with 1.13% returns. The large & midcap strategy of Care Portfolio Managers came in second with 1.08% returns in March. Oro Asset Management’s all weather portfolio was next on the list with 1.05% returns for the month.

Large cap

The Large cap category displayed a modest performance in March. Just about 9 of the 24 strategies did better than the Nifty. The category average return was 0.14% in March.

Tulsian PMS strategy delivered 3.8% for the month and was at the top of the category. Nippon India’s Absolute Freedom strategy was second and delivered 1.2% during March. The Top 200 Core Equity Portfolio from Aditya Birla Sun Life AMC PMS gave 0.94% returns in the month.

In the chart below, the performance of the large-cap category average against the returns of the Nifty during March 2023 is depicted here.

Multi-caps

Multi-cap strategies had a disappointing month, as only 35 of the 150 funds outperformed the BSE 500’s return of 0.33% in March. In fact, the category average was negative. During the month multi-cap strategies delivered an average return of -0.59%.

The edge strategy of Bonanza came first with 3.29% returns during March. Next in the category was the Growth Pro Max Fund of Invasset, with 2.64% returns in the month.

ICICI Prudential’s value strategy came third with 2.22% returns.

In the graph below, the performance comparison of the multi-cap PMS category with the benchmark BSE 500 for March is given.

Thematic 

The thematic category continued to post negative returns in March as well. The 11 strategies in the category gave an average return of -0.32%.

Trivantage Capital Management’s Focused Corp Lenders (Plan B) was the topper of the category, with 1.19% returns during the month.

The India Next Portfolio of Renaissance came in second in March with 1.14% returns.

Anand Rathi Advisors’ MNC PMS strategy, which invests in multinational companies listed in India came third with 0.46% returns in the month.

While March ended on a slightly better note compared to the previous months, the markets still do not seem to be on the verge of a strong rally yet. The RBI paused interest rate hikes in its recent policy, leading most analysts and economists to believe that the rate cycle may have peaked for India, which is a positive for corporates.