Portfolios positioned towards multicap, small and midcaps out-perform

Domestic markets roared in May, shrugging off the lethargy seen in April. Strategies of Portfolio Management Service (PMS) providers not just matched the market step by step, but a large number even out-performed generating alpha for investors. Out of the 241 strategies tracked by PMS Bazaar, as many as 127 or more than 50 per cent outshined Nifty's 6.5 per cent surge in May. Top PMS strategies were led by portfolios biased towards multicap, small and midcaps while large-cap oriented baskets took a backseat. Here is a lowdown on the monthly performance across key funds and categories.

Best strategies of the month

The Number 1 PMS strategy of May 2021 is Rs 412-crore Care Portfolio Managers Growth Plus Value with 17.20 per cent gain. This is a small & midcap fund with nearly a decade of history.

At number 2 was Agreya Concentrated Value Discovery Strategy with 14.42 per cent gain. This is a relatively new multicap fund.

The 3rd best performing strategy in May 2021 is Abakkus Emerging Opportunities, a small & midcap fund, with a decent 14.30 percent gain. The fund is less than a year old.

Carnelian Asset Advisors Shift Strategy, another new multicap product, is placed at 4th rank with 13.80 per cent return.

At 5th slot is Valuequest Investment Advisors Growth strategy with 13.62 per cent return in May. This is one of the multicap funds in the top 10, but the strategy is over 10 year old and has assets worth Rs 626 crore.

Following Valuequest Growth are Kotak Small & Midcap (up 13.13 per cent), Equirus Long Horizon Fund (up 12.96 per cent), Accuracap Dynamo (up 12.80 per cent), Nine Rivers Capital Aurum Small Cap Opp. (up 12.57 per cent) and Renaissance Midcap Portfolio (up 12.24 per cent).

Category spotlight

Large & Midcap: The 5 funds in this category gave an average 5.34 percent gain in May, under-performing the Nifty. Agreya Index Multiplier was the best performer with 7.44 percent gain.

Largecap: There are two dozen strategies in this category. But unfortunately, the average return of large cap PMS at 6.15 per cent was lower than the Nifty. However, Ambit Coffee Can, Asit C Mehta Ace 15 and Renaissance Opportunities delivered 8-9 percent return, beating the benchmark comfortably.

Midcap: There are 22 PMS Bazaar tracked midcap strategies. The average return in May was 7.01 per cent, which beat the Nifty Midcap 100 (6.53 per cent). The top performers include Renaissance Midcap Portfolio (up 12.24 per cent), Asit C Mehta Ace Midcap (up 10.60 per cent) and Envision Capital India Value Portfolio (up 9.20 per cent).

Multicap: For the 135 PMS strategies in this category, the biggest in the industry, the average return in May was 6.64 per cent. This category average was marginally lower than the 6.9 per cent clocked by BSE 500 multicap benchmark. Agreya Concentrated Value Discovery Strategy (up 14.42 per cent), Carnelian Asset Advisors Shift Strategy (up 13.80 per cent) and Valuequest Investment Advisors Growth strategy (up 13.62 per cent) were the 3 best category winners.

Sectoral: Amongst the handful of sectoral PMS strategies, the month of May saw each one delivering reasonable performance. Kotak Pharma (up 6.89 per cent), Kotak Fintech (up 6.20 per cent) and Marcellus Kings of Capital (up 5.26 per cent) were the best performers.

Small & Midcap: This category, with roughly 15 strategies, was the apple of the eye in May. The average return clocked by a PMS strategy in this space was a whopping 9.66 percent, with Care Growth Plus Value (up 17.20 per cent), Abakkus Emerging Opportunities (up 14.30 per cent) and Kotak Small & Mid Cap (up 13.13 per cent) delivering some of the best performances.

Smallcap: The 14 PMS strategies in this category also had a great run in May. The category average of 8.80 per cent was one of the highest and was in line with BSE Smallcap's 8.89 percent return in the month. Accuracap Dynamo (up 12.80 per cent), Nine Rivers Capital Aurum Small Cap Opp. (up 12.57 per cent) and Negen Capital Small Cap Emerging (up 11.31 per cent) were among the best performers this month.

Thematic: The half a dozen thematic PMS strategies performed well. Given their high-risk quotient, returns in May were higher with the category average of 7.7 per cent, which beats Nifty, Nifty Midcap 100 and BSE 500. Green Portfolio MNC Advantage (up 9.25 per cent), Green Portfolio Dividend Yield (up 9.20 per cent) and Anand Rathi Advisors MNC (up 7.90 per cent) were top gainers this month.