Smaller portfolio management services (PMS) funds that are focussed on mid and smallcap stocks managed to outperform their better-known and larger counterparts in February, bucking the negative market trend.
Strategies such as Unique Asset’s Strategic Fund, Vallum Capital’s Vallum India Discovery, Marathon Trends’ Megatrends and Stallion Asset’s Core Fund delivered over 3 percent returns in February, data compiled by PMS Bazaar shows.
Amit Jeswani, Founder and CIO at Stallion Asset said the key reasons behind his fund’s performance were his focus on preserving capital last year and recent purchases of Paytm and Policybazaar.
The Core Fund of Stallion Asset has not performed well in the last one year period. “We are now moving from capital preservation to aggressiveness,” Jeswani said, adding that he believes his portfolio will continue this performance.
Among others, Strategic Fund has delivered 22 percent in the last one year, which is the fifth best among all funds tracked by PMS Bazaar. Vallum India has delivered nearly 9 percent while Megatrends has bled about 3 percent in a year.
The overall market was weak in February, especially thanks to volatility led by Adani Group stocks in the wake of a scathing short seller report. Hawkish US Fed and geopolitical tensions also kept the market returns in check.
Nifty 50, which is used by large-cap funds as their benchmark fell about 2 percent during the month. Nifty Midcap 100 also slumped about 2 percent. BSE 500, which is a benchmark used by multicap and flexicap funds, was down 3 percent and BSE Smallcap slipped 3 percent as well.
Tulsian PMS was the worst-performing strategy, falling nearly 12 percent. This was understandable, as the fund held stocks like Adani Wilmar, HCL Tech, Adani Enterprises and CG Power in its portfolio, some of which fell like nine pins during the month.
Hem Securities’ India Rising SME Stars – one of the standout funds of last one year – also returned negative 11 percent while Basant Maheshwari’s Equity Fund delivered a negative 10 percent return in February.
Among other noteworthy funds that bled money were Care Portfolio’s Growth Plus Value, Agreta Capital’s Agreya Concentrated Value Discovery and Green Portfolio’s Super 30 fund.
Big guns fizzle
Some of the biggest funds managed by marquee fund managers were not spared from the market onslaught. Barring a couple of names, none of them managed to deliver a positive return. They also don’t feature among the top 10 performers of the last one year.
Saurabh Mukherjea promoted Marcellus’ Little Champs was the worst of the lot, delivering negative 5 percent returns. Shyam Sekhar promoted iThought’s Sphere strategy was down nearly 4 percent.
Funds promoted by Sunil Singhania and other funds of Marcellus and iThought, respectively Consistent Compounders and Solitaire bled 2-3 percent.
ASK Domestic Resurgence Portfolio managed to eke out a positive return, delivering 1.44 percent during February, which was followed by iThought’s Vrddhi fund that delivered 0.7 percent return, data showed.
Analysts and fund managers believe the market will likely be choppy going ahead, but this is also a good opportunity for them to bag stocks at lower valuation.
“There is going to be volatility. There is no point predicting a direction (for market),” said Deepak Shenoy, Founder of Capital Mind, a Sebi-registered PMS and wealth advisory firm, commenting on market outlook. “What are you going to do? Not buy stocks because you are afraid? I think the panic is unwarranted at this point in time.”
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