Smallcap and Multicap show superior alpha generation capability

After broader markets surged in February, the last month of FY2020-21 witnessed relatively modest gains. With equity markets rising 1.11 per cent in March, Portfolio Management Services (PMSes) yet again underlined their ability to beat benchmarks. Of the 213 strategies tracked by PMS Bazaar, as many as 107 funds outperformed the Nifty which means investor wealth in every second PMS scheme performed better. Continuing the existing trends, smallcap and multicap PMSes sustained their superior alpha generation capability in March.

Best performers

Like each month, March saw its share of best performers in the billion-dollar PMS universe. The number 1 ranked PMS scheme in March 2021 is Nine Rivers Capital Aurum Small Cap that gained 15.6 per cent, an alpha of 13 percentage points compared to BSE Small Cap (2.45 per cent).

The second-best PMS scheme was Valentis Advisors Rising Star Opportunity that jumped 11.16 per cent, better than small & midcap peers.

At number 3, Alchemy Ascent clocked 8.20 per cent rise in March 2021, far higher than the multicap category average of just 1 per cent.

NJ Asset Management Bluechip emerged as the 4th best PMS performer at 7.18 per cent return, which is also higher than multicap category average.

At number 5 was Centrum PMS Micro that generated 7.16 per cent return in March 2021, placing yet another smallcap scheme in the top performers club.

Also in the top-10 list are Anand Rathi Advisors MNC (6.90 per cent), Fort Capital Investment Advisory Value Fund (6.26 per cent), Anvil Wealth Management Long Holding Strategy (5.95 per cent), Estee Advisors Long Alpha (5.90 per cent) and Kotak SSV - Series 2 (5.52 per cent).

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Category scan

Largecap - This category showed an average return of 1.08 per cent in March 2021, slightly underperforming Nifty 50's 1.11 per cent rise in the same month. The 3 best performers are Ambit Inv. Advisors Coffee Can (4.96 per cent), Asit C Mehta Investment ACE 15 (2.6 per cent) and JM Financial Services Growth & Value (2.44 per cent).

Large & Midcap - Out of this small list, the best schemes for March 2021 were Bonanza Growth (3.36 per cent), Care Portfolio Managers Large & Midcap (1.67 per cent) and IDFC Asset Management NEO Equity Portfolio (1.43 per cent).

Midcap  - This category showed average return of 1.65 per cent in March 2021, slightly underperforming Nifty Midcap 100's 1.82 per cent gain in the same month. The 3 best performers were Right Horizons Super Value (4.22 per cent), Master Portfolio Services Vallum India Discovery (3.68 per cent) and Asit C Mehta Investment Intermediates ACE Midcap (3.60 per cent).

Small & Midcap - For the 14 small & midcap PMSes, the category average return for March 2021 is 1.75 per cent. The 3 best performers are Valentis Advisors Rising Star Opportunity (11.16 per cent), Edelweiss Focused Smallcap (4.58 per cent) and Aditya Birla Sun Life AMC PMS SSP (3.65 per cent).

Multicap - This is the largest category of PMS schemes tracked by PMS Bazaar with over 110 funds. The March 2021 category average return was 0.97 per cent, lower than the BSE 500's 1.19 per cent. The 5 best performing multicap PMSes in March 2021 were Alchemy Ascent (8.20 per cent), NJ Asset Management Bluechip (7.18 per cent), Anvil Wealth Management Long Holding Strategy (5.95 per cent), Estee Advisors Long Alpha (5.90 per cent) and Kotak SSV - Series 2 (5.52 per cent).

Smallcap - For the over two dozen smallcap PMSes, the category average return in March 2021 was 3.71 per cent vis-a-vis 2.45 per cent of BSE Small Cap, showing the alpha generated by the funds. The best performing smallcap PMSes in this month were Nine Rivers Capital Aurum Small Cap (15.6 per cent), Centrum PMS Micro (7.16 per cent) and Fort Capital Investment Advisory Value Fund (6.26 per cent). All these schemes figure in the overall top performers list as well.

Others - Among the handful thematic, sector and multi asset PMSes, the best performers of March 2021 were Anand Rathi Advisors MNC (6.90 per cent), Kotak Pharma (2.17 per cent) and First Global India Multi Asset (1.18 per cent).