After four continuous months of rallying, the markets finally hit the brakes in August as key indices corrected a wee bit. But PMSes defied the trend and continued their healthy run despite weak markets. During the month, the 342 PMSes tracked delivered 2.62% on average. The benchmark Nifty recorded a -2.31% return in August, while the broader market BSE 500 TRI gave -0.61% in the month. The markets were hurt by the selling from FIIs, as they net sold Rs 20,620 crore in the cash market in August, even as DIIs prevented a slide by net buying for Rs. 25,017 crore.

It was a solid month for PMS strategies as 336 of the 342 (or 98%) schemes delivered more than the Nifty TRI. As many as 289 schemes (nearly 85%) outperformed the BSE 500 TRI in August. The top performers’ chart was dominated by small-cap and multi-cap strategies.

Top 10 PMSes of August 2023

The following are the top 10 funds from the 342 PMSes tracked and analyzed by PMS Bazaar.

Despite being a weak month, the top performers put up a superlative show. As many as five of the top 10 PMS Investment Approaches delivered double-digit returns, while the remaining five gave more than 9% in August. As mentioned earlier, Multi Cap, small & midcap styles dominated the list during the month.

At the top of the list was the India Rising SME Stars Investment Approach of Hem Securities, with a staggering 17.06% during the month. The fund invests in listed SME and small cap stocks and owns a concentrated portfolio of high-growth companies.

Next on the list was Samvitti Capital’s PMS Active Alpha Multicap Investment Approach, with a 13.71% return in August. This fund invests in high-quality businesses.

Third in the chart was Invasset’s Growth Pro Max fund, a multi-cap strategy with 12.36% returns.

The performance of the top 10 strategies and their comparison with Nifty and BSE 500 for the month are given below.

Category-wise performance of PMS players

The chart below depicts the performance of the PMS schemes across categories in August. The small category came on top with an average return of 5.91%, followed by the small & midcap segment, with a 4.72% return during the month. Midcap and thematic funds had a reasonable run during August as both delivered average returns of more than 3%. The multi-cap category gave 2.43% in August. Large-cap and large & midcap categories were laggards, with the former even recording negative returns for the month.

Small caps

The surge in small cap stocks in recent months has meant that strategies tracking these companies have delivered strong returns. They have received considerable investor interest. Small cap PMS strategies delivered a robust 5.91% returns during August, continuing their healthy run. 

All the 19 small cap strategies outperformed the BSE 500 TRI and also the Nifty 50 TRI by a fair margin.

India Rising SME Stars of Hem Securities came on top with 17.06% returns in August. 

Equitree Capital Advisors’ Emerging Opportunities fund, which invests in under-researched and under-owned companies, as also contrarian stocks, came second with an 11.43% return in the month.

Aurum Small Cap Opportunities from Nine Rivers Capital came third in the performance chart with 9.11% returns in August. The fund invests in opportunities arising from two themes – alpha drivers and steady performers.

The performance of the category in August with respect to the BSE 500 TRI and Nifty 50 TRI is depicted in the graph below.

Small & Midcaps

The small and midcaps segment was the second-best category during the month, delivering a robust 4.72% return in August.

Electrum Laureate Portfolio from Electrum Portfolio Managers came on top with 11.49% during the month. The fund invests in high-quality growth businesses at reasonable valuations.

IOP V2 from Motilal Oswal came second with a 9.83% return in August, followed closely by IOP, again, from Motilal Oswal with a 9.73% return during the month.

Midcap

Midcap strategies delivered well during August, and the category gave 3.55%. During the month, all 24 strategies beat the Nifty 50 TRI, while as many as 22 outperformed the BSE 500 TRI.

Motilal Oswal’s Focused Midcap Investment Approach came on top with a strong 9.08% return in August.

NAFA Asset Manager’s Clean Tech Portfolio came second with a 7.85% return during the month. Closely following it was the Emerging Bluechip fund from NAFA Asset Managers with 7.28%. This strategy invests in a concentrated portfolio of 20-25 stocks.

The chart below shows how the midcap strategy fared against the Nifty 50 TRI and BSE 500 TRI in August.

Large and Midcap

The 15 large, and midcap funds delivered a modest 0.96% on average in August.

Samvitti Capital’s PMS Aggressive Growth fund came on top with 7.46% returns during the month. It invests in high-quality businesses.

Green Lantern Capital’s Alpha fund was second on the list, with a 6.35% return in August.

The All Weather Portfolio of Torus Oro Portfolio Management was third in the performance chart with 1.56%. This fund follows a rule-based investment strategy and invests across stocks, bonds, gold, and commodities based on market conditions.

Large cap

The relatively weaker performer during the month was the large cap category. In August, the 26 funds delivered -0.22% on average. As many as 24 of the 26 strategies beat the Nifty TRI, but just 10 outperformed the BSE 500 TRI.

Tulsian PMS topped the charts with 6.16% returns during the month. The next in the chart was the Value Migration fund from Motilal Oswal, with 3.66% return in August.

Right Horizons’ India Business Leader Investment Approach came third with 1.7% returns during the month.

In the chart below, the performance of the large-cap category average against the returns of the Nifty 50 TRI and BSE 500 TRI in August is depicted.

Multi-caps

The segment with the most funds, multi-cap strategies delivered 2.43% return on an average during August. We had 141 of the 164 strategies, (more than 8 in 10) outperforming the BSE 500 TRI’s return of -0.61% return in August. As many as 163 (all barring one) outperformed the bluechip Nifty 50 TRI.

Topping the list was the PMS Active Alpha fund from Samvitti Capital, with 13.71% return during the month.

INVASSET’s Growth Pro Max Fund was the second on the list, with 12.36% returns in August.

Coming third in the month was the Long Term Growth strategy of Avestha Fund Management, with 8.46% returns in the month.

The chart below shows how the Multi cap strategy fared against the Nifty 50 TRI and BSE 500 TRI in August.

Thematic 

The thematic category did well in August, and the 15 funds managed to give a healthy 3.19% on average. Interestingly, all the top three strategies were from the Green Portfolio.

Green Portfolio’s Impact ESG fund came on top with a 9.93% return during the month. Next in line was their MNC Advantage fund with a 7.61% return, closely followed by the Dividend Yield Investment Approach with 7.43% returns during the month.

Despite the moderate correction in the indices in August, the mood in the markets still seems fairly buoyant, with investors looking to enter the markets at any sign of weakness. Though food price inflation played spoilsport for the last couple of months, there seem to be signs of food prices cooling off. With the first quarter GDP growth coming in at 7.8% for India, there are limited concerns on the domestic front. But inflation in the US has gone up a wee bit in August, and elsewhere the European Central Bank has increased interest rates once again to record levels.

China’s growth is stuttering, and there are concerns surrounding the real estate segment there. Meanwhile, crude oil prices have gone past $90 a barrel raising concerns across the board for governments around the world. The concerns for domestic investors seem more on the macroeconomic front and news flow from advanced economies for the foreseeable future.