Over 100 PMS schemes outperform Nifty in January, top 8 give double-digit returns

Concerns over Coronavirus, as well as Budget uncertainty, led to profit booking on D-Street in January which pushed Nifty50 lower by 1.7 percent, but there are over 100 portfolio management schemes that outperformed the benchmark index by delivering positive returns, data showed. As many as 115 portfolio management schemes from across categories delivered positive returns at a time when benchmark indices gave negative returns, and the top 8 schemes rose more than 10 percent in January, data from PMSBazaar.com, an online portal used for PMS comparison, showed. Portfolio Management Services cater to wealthy investors with portfolio sizes exceeding Rs 50 lakh. The professional fee charged by them is slightly higher than regular mutual funds (MFs). Top 8 PMS schemes which have given double-digit returns in January are CapGrow Capital Advisor's Special Situation scheme, Motilal Oswal’s IOP scheme, Centrum PMS – Micro Fund, Nippon India’s Emerging India, Ambit Capital’s Emerging Giants, Sundaram AMC’s S E L F portfolio, Centrum PMS’s Good to Great scheme and AnadRathi’s Impress PMS. Schemes which have outperformed Nifty50 in January belong to the broader market space. Most of the schemes are from the Multi-cap category as well as the Small & Midcap category – which means schemes benefitted from the rally in the small & midcap space. Multi-Cap category funds are more diversified and include stocks from various market-cap baskets. A typical multi-cap portfolio comprises of stocks from large-cap, midcap, and smallcap space. The S&P BSE Midcap index rallied 3.3 percent while the S&P BSE Smallcap index gained more than 7 percent, data from BSE showed. Historical data suggests that small & midcaps have usually done well when the economy is growing. The Budget 2020, as well as Reserve Bank of India’s MPC meeting, suggested that the growth will be muted in the short term but should pick up in FY21. “Midcap and smallcap stocks generally perform in healthy market condition and for last 2-3 months we are in positive trend and market has witnessed broad base buying action in quality midcap and small caps,” Rajesh Palviya, Head Technical Derivatives at Axis Securities. “We expect Smallcap and midcap stocks to improve further and we can see another 3-5% upside in Midcap and smallcap space. An investor can add quality midcaps and small-cap can in the portfolio for decent returns in near/short term,” he said. Scheme performance: Among the schemes which delivered double-digit returns in January include CapGrow Capital’s Special Situation strategy which gave over 20 percent return, according to data from PMSBazaar.com. The Special Situation strategy is an event-driven strategy, and the main objective of the strategy is to utilize special situations that stem from corporate actions including buy-backs, delisting, spin-offs and demergers, delisting or Broken IPOs and distressed situations to generate returns.

Motilal Oswal IPO strategy which is focused on Small & Midcaps delivered a 13 percent return in January. The Strategy aims to generate long term capital appreciation by creating a focused portfolio of high growth stocks having the potential to grow more than the nominal GDP for the next 5-7 years across and which are available at reasonable market prices.

Centrum PMS, Micro Fund which is focused on smallcap delivered 12 percent return. The fund’s objective is to seek long-term capital appreciation by investing predominantly in equity/equity-related instruments of companies that can be termed as microcaps.