PMS strategies: Mid & smallcap-focused minnows beat their larger peers in June

NEW DELHI: Putting up a stellar show in June, smaller and lesser-known midcap- and smallcap-focused PMS strategies outperformed their larger peers, most of which were heavy on largecap stocks.

They beat the portfolio management schemes run by some of the celebrity fund managers.

Bonanza Portfolio’s Value strategy, which invests nearly two-thirds of its money in midcap and smallcap stocks, topped the charts with 14 per cent return for the month. It was followed by Right Horizon’s Minerva India Under Served, which holds shares like JK Paper,

, Fiem Industries and Zensar Tech.

Other top gainers of the month included Roha Asset Managers’ Emerging Champions, Green Portfolio’s Dividend Yield and Motilal Oswal’s Focused Midcap strategies, each of which gained more than 10 per cent, data from PMSBazaar showed.

All of these funds have delivered 33-65 per cent return for the ongoing calendar, while some have more than doubled in the last one year.

“Our strategy has delivered 100 per cent return in the last one year, and it’s our stock selection framework, investment thesis and conviction reinforcement in ideas like Tata Elxsi, Vaibhav Global, Rajratan Global and Bajaj Finance which resulted in the sound performance,” said Achin Goel, fund manager at Bonanza Value strategy.

The performance of the midcap and smallcap-oriented PMSes resonated with the outperformance of respective indices during the month. BSE Midcap Index rose 3.57 per cent in June and BSE Smallcap 6.93 per cent, against just 1.05 per cent rise in the flagship BSE Sensex.

Out of about 230 PMS strategies, only two delivered negative returns for the month – Agreya Capital Advisors’ Index Multiplier and Exposure Equity Index.

Multicap portfolio strategies run by some of the biggest names in the industry – Bharat Shah, Sunil Singhania, Vikas Khemani, Shankar Sharma, Samir Arora and Basant Maheshwari – managed to either beat their benchmarks or performed on par.

Among the largecap funds, JM Financial’s Growth & Value, Wize Market Analytics’ Capital Mind, Chanakya Capital Services’ Chanakya PMS and Aditya Birla’s Top 200 Core Equity were among the top strategies that beat the Sensex performance. Many of these PMSes held midcap stocks.

Thanks to the stocks rally going on since last one year, 20 PMSes have more than doubled their investors’ money. Nine Rivers Capital’s Aurum Smallcap Opportunities topped the chart with 168 per cent return for this period.

However, it may be difficult for these money managers to replicate that performance over the next few months. Many expect the market to move sideways in the near term, with stray stock-specific moves.

“The market will continue to be constructive on the back of earnings growth. There will not be a breakout, but the market will continue to inch up at every quarter’s earnings growth rate and based on the pace of Covid vaccination,” said Anand Shah, Head PMS & AIF Investments at ICICI Pru AMC.

There is no reason for a big-bang rally at this stage, he said.