After a sombre end to January, the Union Budget and the economy coming out of the technical recession reignited the bull run in Indian markets which ended 6.56 percent higher on a month-on-month basis.
The rally was marked by broader markets outperforming the frontliners. The Nifty Smallcap 100 ended with gains of 12.16 percent, while the Nifty Midcap 100 closed 11.28 percent higher in February, suggesting that big money is now penetrating the broader economy.
The outperformance of the equity markets was also visible in the returns of Portfolio Management Schemes (PMSes) as all but one fund ended in the green in February. Moreover, almost 50 percent (108 out of 219) of the funds managed to beat the Nifty in February.
Portfolio Management Services cater to wealthy investors and the professional fee charged by them is higher than regular mutual funds (MFs).
Right Horizons' Super Value fund was the top gainer, rising 21.74 percent on a month-on-month basis. The midcap fund, managed by Anil Rego, focuses heavily on engineering, as it constituted about 20 percent of its entire portfolio as of February 28, 2021. Chemicals, financials, services and FMCG are the other major sectors the fund has exposure to.
As of February 28, 2021, its top five holdings included Dixon Technologies, IRCTC, APL Apollo Tubes, Neogen Chemicals and Solara Active Pharma Sciences.
Roha Asset Managers' Emerging Champions at 20.15 percent ran a close second. The smallcap-focused fund is managed by Dhiraj Sachdev. Its top five holdings, as of February 28, 2021, were Praj Industries, JB Chemicals & Pharmaceuticals, Piramal Enterprises, Greenply Industries and Birla Corporation.
Valentis Advisors' Rising Star Opportunity (19.43 percent), Centrum PMS' Multibagger (16.69 percent), Centrum PMS' Good to Great (16.35 percent) and TCG Advisory Services' RAF Fund (15.15 percent) were the other top performers in February.
Nine of the top ten funds in during the month were from the mid & smallcap space.
Kotak's Pharma fund was the only scheme that ended in the negative in February. The sectoral fund dropped 1.11 percent but outperformed its benchmark, Nifty Pharma, that slipped 1.99 percent
Who led the charge?
Of the 19 largecap funds PMS Bazaar looked at, only four managed to outperform the Nifty in February. These include Motilal Oswal's Value (8.84 percent), Aditya Birla Capital's Top 200 crore Equity Portfoli0 (8.15 percent), Right Horizons' India Business Leader (7.3 percent) and Centrum PMS' Built To Last (6.59 percent).
From the large and midcap space, LIC MF's Value Equity+ (6.06 percent), IDFC Asset Management's Neo Equity Portfolio (4.34 percent) and Care Portfolio Management's Large & Midcap Strategy (4.3 percent) were among the top gainers.
In comparison, 28 percent of the midcap-focused funds outperformed the Nifty Midcap 100. These include Right Horizons' Super Value fund (21.74 percent), Centrum PMS' Multibagger (16.69 percent) and Centrum PMS' Good to Great (16.35 percent).
Of the 10 smallcap schemes PMSBazaar.com looked at, three strategies outperformed the benchmark Nifty smallcap 100. Roha Asset Managers' Emerging Champions was the best performing PMS from this space.
Nine Rivers Capital's Aurum Smallcap (15.1 percent), ICICI Prudential's PIPE (12.53 percent) and Marcellus' Little Champs (9.66 percent) were some of the other top-performing smallcap schemes. From the mid and small category, Geojit Financial Services' Advantage Portfolio was the only scheme that reported its returns. The fund rose 7.33 percent in February.
In the multicap space, 47 schemes managed to outperform BSE 500's 7.77 percent return. These include TCG Advisory Services' RAF fund (15.15 percent), Hanut Alternate Investments LLP's Hanut Fundamental Quant (14.46 percent), Centrum PMS' Wealth Creator (14.26 percent) and Globe Capital Market's Value (14.11 percent).
Among others, Trivantage Capital Management's Resurgent Financial Equity at 10.66 percent and Right Horizons' Alphabots India Prime at 9.9 percent led the charge in sector fund and thematic category.