Small, midcap PMSes perform better than large, multicap peers in January 2021

Staff Writer   /   February 11, 2021

With markets stumbling in the first month of calendar year 2021, it was a spirited show by small and midcap PMSes to stay afloat as largecap and multicap strategies tripped. In a month where Nifty fell 2.5 per cent, Valentis Advisors Rising Star Opportunity and Invesco Caterpillar were the top PMS funds with 8-9 per cent gains. Unfortunately, the going was not as easy for the rest. Over 100 strategies posted negative returns in January 2021, but as PMSBazaar data shows thankfully 70 per cent of them performed better than the Nifty. Read on to know more details.

Top strategies

The correction was concentrated to largecaps in January. So, pure-play largecap focussed portfolios as well as the ones with largecap bias paid a price. The stock market correction, after a healthy rise, happened on account of Budget fears. This month a PMS manager did not need to do anything innovative to come on top. Just 9 per cent gain was enough for the top fund. Though cash level data is not available, we reckon some strategies could have simply out-performed based on enhanced cash cushion. 
Valentis Advisors Rising Star Opportunity, a small & midcap PMS, clocked 9.08% this month, the highest among over 190 schemes tracked by PMSBazaar data. The second rank-holder was Invesco Caterpillar, a midcap scheme, with 7.51 per cent return. Negen Capital Small Cap Emerging was 3rd with 4.66 per cent, followed by Phillip Capital Emerging India Portfolio (mid cap) with 4.43 per cent, and SageOne Small & Microcap with 4.40 per cent. Others in the top-10 club were Right Horizons Minerva India Under-Served (smallcap), Right Horizons Alphabots India Prime, Nafa Asset Managers Emerging Bluechip and Roha Asset Managers Emerging Champions.

Category wise

Multicap PMSes are the biggest category with over 100 products. They posted an average return of -1.46 per cent in January, which is slightly better than the 1.8 per cent loss of BSE 500. The 3 best performers this month, with very small amounts of gains, were Buoyant Capital Opportunities, Credent Asset Management Growth Portfolio and Bonanza Value. On the other hand, the worst multicap PMS performers were Basant Maheshwari Wealth Advisors Equity Fund, Marcellus Consistent Compounders and Tamohara Investment Managers SWAT.

In the Largecap PMS category, ICICI Pru Largecap Portfolio was the lone strategy with positive returns, while the rest were in the red. Varanium Capital Advisors Large Cap Focused Fund, Composite Investments Lighthouse and Asit C Mehta Intermediaries ACE 50 all lost over 7 per cent each, earning them a spot among the notable laggards.

In the Midcap PMS space, the picture was slightly better even though top performers, such as Master Portfolio Services Vallum India Discovery, Ambit Good & Clean India Fund and Centrum Multibagger, did not generate high returns. The top laggards in the Midcap PMS segment this month were Tata Emerging Opportunities, Nippon India Emerging India and Renaissance Midcap Portfolio. 

The story was the same for the Smallcap PMS category. The best performers this month were Nafa Asset Managers Smallcap, Ambit Emerging Giants and Centrum Micro. The laggards included Nine Rivers Capital Aurum Small Cap Opp., Sundaram Alternates Rising Stars and Marcellus Little Champs.

Note that PMS is a long-term investment and equity-linked products should be given more than five years to perform. Any decision to invest or exit should be based on relative performance assessment and over longer periods such as 1, 3 and 5 year as well out/under-performance with respect to the PMS benchmark index.

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