The Indian stock market was volatile in March due to valuation concerns and new regulations. Despite the volatility, the main indices still managed to end slightly positive with large-cap stocks outperforming the broader markets. While the average PMS approach delivered (-)1.2%, some still gave a formidable performance.
March was volatile for the equity markets as valuation concerns and market regulator SEBI’s diktat on stress testing to fund houses left the indices gyrating over the month. Of course, the main indices still ended marginally in the green for the period. Large caps did better than the broader markets during the month. March saw the Nifty 50 TRI recorded 1.57% returns in March, while the BSE 500 TRI gave 0.86% returns.
Both FIIs and DIIs were net buyers in the cash market during the month. While FIIs purchased to the tune of Rs 3314 crore in March, DIIs bought Rs 56311 crore in the cash market in the same period.
The average return from the 365 PMS approaches was -1.2% in March. The top PMS approaches, however, still recorded formidable performances during the month.
In March, 51 approaches outperformed the Nifty TRI, while 93 funds delivered more than the BSE 500 TRI.
The top performers’ list in the month was dominated by multiple strategies. With gold delivering well during the month, multi-asset strategies figured prominently in the top 10 performers’ list.
Top 10 PMS Investment Approaches of March 2024
The following are the top 10 funds from the 365 PMS approaches tracked and analysed by PMS Bazaar.
The top 10 schemes delivered excellent performances in March. These funds gave 2-5 percentage points more than the Nifty TRI during the month.
The top three positions were taken up by the multi-asset strategies of Pace Financial Investment adviser.
Tresor Flexi topped the charts with 7.4% returns during the month. It follows a flexible strategy with respect to asset allocation.
Tresor Prive took the second spot with 4.73% returns in March. This fund caters exclusively to UHNIs and Family Offices and offers bespoke solutions.
Tresor Sustainer came third with 4.7% returns during the month. This strategy combines equity, precious metals and fixed income in its portfolio to ensure moderate volatility.
The performance of the top 10 PMS approaches and their comparison with Nifty and BSE 500 for the month are given below.
Category-wise performance of PMS players
For the second successive month, large caps stood out. The category gave 1.15% on average in March. This was followed by the large & midcap segment with 0.18% average returns in the month, while thematic strategies came third with 0.11% returns in March.
All the other categories recorded negative average returns during the month. Small caps had the steepest fall with the category recording -5.79% returns in March.
Small & midcap and midcap categories fell more than 2% each during the month. Multicaps fared a tad better with -1.11% returns recorded on average in March.
The performance of the PMS categories is depicted below:
Small cap category
The month of March turned out to be a tough one of small caps. During the month, the category gave -5.79% on average. All the funds in the category ended in the red in March.
Of the 19 small-cap PMS approaches, no fund outperformed either the BSE 500 TRI or the Nifty 50 TRI.
The India Opportunities Product from Aequitas Investment Consultancy was the best performer in the category with -0.86% returns during the month. The fund follows a blend of growth, contrarian and value styles to pick stocks.
PRP Edge Wealth’s Alphaa Focused Small Cap Portfolio took the second spot with -2.21% returns on an average in March.
Taking the third spot was the Small Cap Portfolio of NAFA Asset Managers with -2.95% returns. The strategy looks to invest in 25-40 growth stocks with quality management, low leverage and high return on equity.
The performance of the category in March concerning the BSE 500 TRI and Nifty 50 TRI is depicted in the graph below.
Small & Midcap category
The small and midcaps segment gave -2.78% returns during March.
The Growth fund from Green Lantern Capital took the top slot with 1.47% returns in the month. This fund invests in companies that are industry leaders and generate healthy returns on equity, apart from having a reasonable margin of safety.
ASK Emerging Opportunities Portfolio came second with 1.27% returns in March. The fund invests in a concentrated portfolio of high-quality and high-growth businesses.
Invesco Asset Management’s Caterpillar took the third position with 0.73% returns in the month.
Midcap category
Midcap strategies also experienced a challenging month. The category gave -2.17% on average during the month. Of the 22 PMS approaches tracked, one fund managed to beat the Nifty 50 TRI and the BSE 500 TRI.
NAFA Asset Managers’ Clean Tech Portfolio came on top with 4.6% returns during the month. The fund invests in a concentrated portfolio of 10-15 stocks that are mostly into or related to the Electric Vehicle business.
Concept Investwell’s Marvel fund took the next position with 0.36% returns during the month.
The Smart Beta Portfolio of Abans Investment Managers came third in the month with 0.3% returns. This fund takes an algorithm-driven and rule-based stock selection model.
The chart below shows how the midcap strategy fared against the Nifty 50 TRI and BSE 500 TRI in March.
Large and Midcap category
This category had a relatively flat and unchanged outing in March. The 16 Large & midcap funds gave 0.18% on average during the month.
Taking the top slot was Samvitti Capital’s PMS Long Term Growth fund with 4.51% returns during the month. The fund invests in high-quality businesses.
Torus Oro Portfolio Management’s All Weather Portfolio was the second in the list within the category with 3.72% returns in March.
The third position was taken by the Large & Midcap strategy of Care Portfolio Managers with 2.18% returns in the month. This fund invests in 18-20 stocks from the top 250 companies by market cap. The strategy follows a model portfolio concept of investing.
Large-cap category
The Large Cap category was the best performer once again in March as it was in the previous month. The 24 funds in the category delivered 1.15% on average during the month. As many as 9 funds outperformed the Nifty 50 TRI, and 16 beat the BSE 500 TRI.
Ambit Global Private Client’s Caliber fund was the best performer of the category with 3.7% returns during the month.
ICICI Prudential AMC’s large-cap strategy came second in March with 3.43% returns.
Taking the third spot with 2.95% returns during the month was the Alpha 100 fund from Alchemy Capital Management. This fund uses an objective, back-tested and data-driven approach to stock selection.
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 March is depicted.
Multi-cap category
This category has the most funds and is keenly followed. The 167 funds in the category gave -1.11% on average during March. As many as 41 PMS approaches outperformed the BSE 500 TRI during the month and 23 did better than the Nifty TRI.
The Core Value Strategy-Concentrated Option fund from O3 Securities was the best performer in the category for the month with 3.62% returns. This fund invests in high-quality funds at reasonable valuations.
Taking the second slot was the Elegant fund from Concept Investwell with 3.58% returns in March. This is found in a core portfolio of quality stocks and a non-core portfolio based on different themes.
The Ace Equity Portfolio from ICICI Securities came third with 3.43% returns during the month.
In the chart below, the performance of the multicap category average against the returns of the Nifty 50 TRI and BSE 500 TRI in March is depicted.
Thematic category
The thematic category had a relatively better month with the segment giving 0.11% on an average. Some of the funds in the category did well in March.
Invesco Asset Management’s Dawn strategy was the best performer in March within the category with 3.21% returns. This strategy is large-cap-driven and looks to gain from a cyclical recovery.
HSBC Asset Management India’s India Next Portfolio came second with 2.58% returns in the month.
Taking the third spot was the 5TX5T strategy of Narnolia Financial Services with 2.14% returns in March. The strategy invests in companies that are part of the Nifty Mid-Small Cap 400 Index. This fund looks to invest in companies with high-quality moat and growth prospects.
Takeaway
Investors’ concerns regarding high valuations, especially in the mid and small-cap spaces meant that the corrections were steep in the month. Large caps emerged as a haven of safety in March.
The financial year started with the RBI maintaining the status quo on interest rates. However, anxiety in the bond markets increased after the Federal Reserve sounded hawkish post the latest inflation data in the US, which raised concerns about a delayed rate-cutting cycle.
Yields hardened a bit, though not alarmingly so.
But the macro environment once again looks hazy as the prospect of heightened geopolitical tensions in the Middle East and rising crude oil prices makes the bearish case for the equity markets.
Domestic general elections are also on the horizon and can usher in a period of volatility in the markets. As the results season begins, earnings announcements and clarity on macro factors will guide the market direction over the coming weeks.
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