With 97% schemes out-performing the benchmark, focus turning on smallcap strategies that have done exceedingly well

The action in July, just like June, shifted out of the benchmark indices to the broader market. This is possibly why investors have gone into mid and smallcap stocks in a big way, thereby resulting in strong performance. Given their concentrated andd well-research approach, this has made the job of PMS strategies a tad easier when it comes to beating leading benchmarks. In June over 200 PMSes beat Nifty, and in July the success rate was even higher with 252 PMSes humbling the 50-stock Nifty portfolio. Smallcap PMSes stood out with solid performances. As the economy opens up, small and medium sized companies will do better than stable earnings from large firms. The PMS strategies playing the cyclical theme to the hilt will continue to outperform. Read more about the performance.

Best strategies of the month

Though an apple to apple comparison may not be ideal when comparing 260 odd PMS strategies, investors at the end of the day love returns. Hence, schemes with higher returns get more eyeballs. Ofcourse, the risk part of the entire return game needs to be understood, which is an exercise better done by advisors. Nevertheless, July 2021 saw some fantastic performances from PMS strategies.

At number 1 was Right Horizons Minera India Under-Served that recorded a swashbuckling show with the 1-month return jumping to 22.95 per cent, more than 3 times the 6.16 per cent gains logged by BSE Smallcap index. Do note that this PMS strategy was ranked overall number 2 in June.

At second was Aequitas Investment Consultancy India Opportunities with a whopping 14.98 per cent gain in July 2021, more than double the smallcap index.

Green Lantern Capital Growth Fund was ranked no. 3 with an impressive 14.62 per cent, Bonanza Value was no. 4 with 14.41 per cent and ICICI Pru PMS PIPE strategy was 5th with a solid 13.30 per cent return in July 2021. Among the top-5, Bonanza Value is the only multicap strategy and do note in June too this PMS was ranked second overall.

From 5th to 10th slot, PMS performers clocked 10-13 per cent gains. Care Portfolio Managers Growth Plus Value showed 13.2 per cent return, followed by Agreya Concentrated Value Discovery (up 11.85 per cent), Centrum Micro (up 11.63 per cent), QED Capital Advisors Alphabets (up 10.51 per cent) and Abakkus Emerging Opportunities (up 10.50 per cent).

At a time when headline benchmarks are struggling to definitely move ahead, top PMS strategies giving double-digit percentage returns is enthusing for PMS investors and the PMS community at large.

Category spotlight

Now, let us take a detailed look at how the main PMS categories have performed vis a vis returns, range, alpha vs. benchmark etc. Do note that we will avoid categories which are small or insigificant.

Largecap - There are 25 largecap PMS schemes. The July 2021 category average reeturn was 2.54 per cent, which beat the Nifty 50's 0.26 per cent slim gain. The share of strategies that beat the Nifty was high, with 22 of the 25 PMSes displaying outperformance. The 3 top performers were QED Capital Advisors Alphabets (up 10.51 per cent), Alchemy Leaders (up 10.20 per cent) and ICICI Pru Largecap Portfolio (up 5.87 per cent).

Large & Midcap - There are half a dozen PMS strategies in the large & midcap category, which has over the last year or so seen some launches. The July 2021 category average gain was 2.94 per cent. The top performers included Bonanza Growth (up 6.12 per cent), Upside AI (up 3.89 per cent) and IDFC NEO (up 3.39 per cent). NEO had performed well in June as well.

Midcap - There are 22 PMS funds in midcap space, with quite a few that have seen a full market cycle. The July 2021 category average return stood at 4.75 per cent, higher than the 3.13 per cent logged by Nifty Midcap 100 (up 3.13 per cent). Barring one, all midcap PMS strategies posted positive gains with top 3 performers being from the house of Centrum viz. Centrum Multibagger (up 7.5 per cent), Centrum Good to Great (up 7.39 per cent) and Centrum Deep Value (up 7.06 per cent). Deep Value strategy was amongst the best in June as well.

Multicap - This is the biggest category of strategies tracked by PMS Bazaar. There are about 150 schemes. The category average gain in July 2021 was 4.46 per cent, massive out-performance over 1.35 per cent. The top 3 performers in the multicap category this month are Bonanza Value (up 14.41 per cent), Agreya Concentrated Value Discovery (up 11.85 per cent) and Green Lantern Capital Alpha (up 9.70 per cent). Bonanza Value continues out-perform as it did in June 2021.

Sector - There are half a dozen sector PMS funds. The category average gain was 2.63 per cent. The 3 best performers in July 2021 are Trivantage Capital Management Resurgent Financials Equity (up 4.19 per cent), Kotak Fintech (up 3.85 per cent) and ASK Investment Managers Financial Opportunuties Portfolio (up 3.03 per cent).

Small & Midcap - There are 17 small & midcap PMS strategies. The category average gain in July 2021 was 7.34 per cent, with top 3 performers being Care Portfolio Managers Growth Plus Value (up 13.20 per cent), Abakkus Emerging Opportunities (up 10.50 per cent) and Valentis Advisors Rising Star Opportunity (up 10.40 per cent). None of the small & midcap PMS strategies clocked negative returns.

Smallcap - There are 16 smallcap PMS strategies. The July 2021 category average gain is 9.05 per cent, higher than the BSE Smallcap (up 6.16 per cent). The top 3 performers are Right Horizons Minerva India Under-Served (up 22.95 per cent), Aequitas Investment Consultancy India Opp. (up 14.98 per cent) and Green Lantern Capital Growth (up 14.62 per cent). All the 16 smallcap strategies have recorded positive returns.

Thematic - There are 6 thematic PMS strategies. The top performers in July 2021 are Green Portfolio Dividend Yield (up 10.10 per cent), Green Portfolio MNC Advantage (up 5 per cent) and Anand Rathi Advisors MNC PMS (up 4.60 per cent). Barring 1, all the other thematic PMS strategies showed positive gains.