Top PMS schemes clock double-digit gains in July; smallcap & multicap funds become favourites

Despite mixed results from India Inc, continual rise in COVID-19 cases, the market remained resilient in July, rising 7.5 percent on a month-on-month basis.

The bullish momentum helped 24 percent of Portfolio Management Schemes (PMSes) log benchmark-beating returns during the month.

As many as 44 PMS schemes out of the 180 strategies by more than 85 AMCs outperformed Nifty during July, data collated by PMSBazaar.com, an online portal used for PMS comparison, showed.

Wize Market Analytics Capital Mind- Monemtum Portfolio topped the list with a whopping 22.6 percent return during July. Other top performing schemes included Moneylife MAS Growth (16.03 percent), Equirus Securities Long Horizon Fund (13.34 percent) and Right Horizons Minerva India Under-Served ( 12.9 percent).

While the stock holding of Wize Market Analytics Capital Mind- Monemtum Portfolio and Moneylife MAS Growth were undisclosed, ALKYL Amines Chemicals, APL Apollo Tubes, Mannappuram Finance, Garware Technical Fibres and Polycab India were some of the top holdings of Equirus Securities Long Horizon Fund, data collected from PMS AIF World, a research-backed financial services firm showed.

Seven out of the 10 best performing PMSes were from the smallcap and multicap space.

Despite the dominance of multicap focused funds in the list of top performing PMSes, average gain across such schemes stood at 6.04 percent during the month, a shade lower than BSE 500's 6.8 percent. However, the smallcap strategies managed to outperform its strategy benchmark BSE Smallcap which rose 5.2 percent during July.

In July, largecap PMSes returned 5.45 percent underperforming Nifty on a month-on-month basis. The three best performers from the space included AccuraCap Alpha10 up 8.93 percent, Asit C Mehta Investment Intermediaries (8.7 percent) and Varanium Capital Advisors Largecap Focused Fund (7.9 percent).

Schemes from the midcap category logged a nifty 6.33 percent gains duing July, outperforming their strategy benchmark Nifty Midcap 100 which rose 5.22 percent during the month. The three best performers from the midcap category were Motilal Oswal Focused Midcap up 11.46 percent, Systematic Dynamic Investment Portfolio (9.84 percent) and Sundaram Alternate SELF Portfolio (8.7 percent).

Despite the outperformance of smallcap and midcap strategies, Kamal Manocha, CEO and Chief Strategist at PMS AIF World that investors should favour multicap PMSes for better long-term compounding and lower short-term volatility.

"Investors who do not have a high-risk appetite should avoid pure small and midcap portfolios, or invest in pure mid & smallcap portfolios through mutual funds and not portfolio management services as PMS structure is concentrated as well as demands high minimum investment of Rs 50 lakhs. Since many new retail investors have become active recently, mid and smallcap space is seeing a lot of momentum. However, quality investing should be preferred over momentum investing, as momentum investing many deliver quick returns, but seldom provides wealth creation experience," he said.