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Small-cap, mid-cap PMS strategies gain momentum with up to 21% returns in 5 years

Over the past decade, the PMS industry has added 63,550 clients and their AUM have grown to Rs 2.5 lakh crore, from Rs 22,614 crore in June 2012. Here are a few leaders of the pack under the small & midcap category.

September 06, 2022 / 09:40 AM IST
Like mutual fund (MF) schemes, Portfolio Management Service (PMS) strategies have also become a popular investment vehicle among high net worth individuals (the term ‘strategy’ is used in the PMS industry similar to a ‘scheme’ in the MF industry). In the last 10 years, the PMS industry added 63,550 clients and their Assets Under Management (AUM) have grown manifold to Rs 2.5 lakh crore -- from Rs 22,614 crore in June 2012. Due to a PMS’s high-risk, high-return nature, the minimum investment is Rs 50 lakh.
Like mutual fund (MF) schemes, Portfolio Management Service (PMS) strategies have also become a popular investment vehicle among high net worth individuals (the term ‘strategy’ is used in the PMS industry similar to a ‘scheme’ in the MF industry). In the last 10 years, the PMS industry added 63,550 clients and their Assets Under Management (AUM) have grown manifold to Rs 2.5 lakh crore -- from Rs 22,614 crore in June 2012. Due to a PMS’s high-risk, high-return nature, the minimum investment is Rs 50 lakh.
Unlike MFs with a standard categorisation, PMS strategies differ. Most of them are sector bets, with highly concentrated stocks. According to PMS Bazaar data, currently, there are 291 strategies offered by 139 PMS managers. R Pallavarajan, founder, PMS Bazaar, says: “Each PMS strategy is unique. They have their own classification, which can be broadly categorised into large-cap, mid-cap, small-cap or multi-cap categories. However, the multi-cap category comprises a larger share of AUM”. Here we list out the top 10 ‘small- and mid-cap’ PMS strategies (of the 69 categorised by PMS Bazaar) in terms of their last 5-year returns. Only those strategies that have disclosed their portfolio holdings are considered. Returns displayed here are computed as per the SEBI-prescribed Time-Weighted Rate of Return (TWRR) method. Return and portfolio value are as of July 31, 2022. Source: PMS Bazaar.
Unlike MFs with a standard categorisation, PMS strategies differ. Most of them are sector bets, with highly concentrated stocks. According to PMS Bazaar data, currently, there are 291 strategies offered by 139 PMS managers. R Pallavarajan, founder, PMS Bazaar, says: “Each PMS strategy is unique. They have their own classification, which can be broadly categorised into large-cap, mid-cap, small-cap or multi-cap categories. However, the multi-cap category comprises a larger share of AUM”. Here we list out the top 10 ‘small- and mid-cap’ PMS strategies (of the 69 categorised by PMS Bazaar) in terms of their last 5-year returns. Only those strategies that have disclosed their portfolio holdings are considered. Returns displayed here are computed as per the SEBI-prescribed Time-Weighted Rate of Return (TWRR) method. Return and portfolio value are as of July 31, 2022. Source: PMS Bazaar.
Equirus Wealth’ Long Horizon Fund strategy tops the list, with a compounded annualised return of 21.1 percent. The TWRR method is one of the ways to calculate the compound rate of return of a portfolio by considering the inflows, outflows and cash components. It calculates the total return of the portfolio by breaking up the return into separate intervals, based on whether money was added or withdrawn from the fund.
Equirus Wealth’ Long Horizon Fund strategy tops the list, with a compounded annualised return of 21.1 percent. The TWRR method is one of the ways to calculate the compound rate of return of a portfolio by considering the inflows, outflows and cash components. It calculates the total return of the portfolio by breaking up the return into separate intervals, based on whether money was added or withdrawn from the fund.
The investment objective of the Centrum PMS – Micro strategy is long- term capital appreciation by investing predominantly in equity/equity-related instruments of companies that can be termed as micro-caps. In order to provide stability to the portfolio, exposure to large-cap stocks is done with a weightage seen suitable to the prevailing market condition.
The investment objective of the Centrum PMS – Micro strategy is long- term capital appreciation by investing predominantly in equity/equity-related instruments of companies that can be termed as micro-caps. In order to provide stability to the portfolio, exposure to large-cap stocks is done with a weightage seen suitable to the prevailing market condition.
The investment objective of this strategy is to create significant value over the long term by investing in deep-value stocks, some of which may be relatively unknown small- and mid-cap companies. It was launched in December 2015.
The investment objective of this strategy is to create significant value over the long term by investing in deep-value stocks, some of which may be relatively unknown small- and mid-cap companies. It was launched in December 2015.
Launched in March 2012, the Centrum PMS – Multibagger strategy also tries to create value over the long term by investing in deep-value stocks, some of which may be relatively unknown small- and mid-cap companies. Deep Value I differs from Deep Value IV in that the former looks for companies that are on the verge of a turnaround due to various factors like change in management, demand-supply scenario, improved business environment, favourable government policies, etc. Its strategy looks a bit similar to a special situations equity MF.
Launched in March 2012, the Centrum PMS – Multibagger strategy also tries to create value over the long term by investing in deep-value stocks, some of which may be relatively unknown small- and mid-cap companies. Deep Value I differs from Deep Value IV in that the former looks for companies that are on the verge of a turnaround due to various factors like change in management, demand-supply scenario, improved business environment, favourable government policies, etc. Its strategy looks a bit similar to a special situations equity MF.
Ambit Inv. Advisors - Good & Clean -- was launched in March 2015. It has a mid-cap orientation with a focus on franchise strength, efficient capital allocation track record, high management quality and good accounting practices.
Ambit Inv. Advisors - Good & Clean -- was launched in March 2015. It has a mid-cap orientation with a focus on franchise strength, efficient capital allocation track record, high management quality and good accounting practices.
Launched in October 2011, the objective of this strategy is to invest in companies which have under-utilised capacities and innovative business models that can lead to market share gains and margin expansion.
Launched in October 2011, the objective of this strategy is to invest in companies which have under-utilised capacities and innovative business models that can lead to market share gains and margin expansion.
Right Horizons - Super Value has a diversified equity portfolio that aims to achieve long-term capital appreciation and generate returns by investing in mid- and small-cap companies which enjoy some economic moat, or that are in special situations or in the midst of an unfavourable business cycle, temporarily.
Right Horizons - Super Value has a diversified equity portfolio that aims to achieve long-term capital appreciation and generate returns by investing in mid- and small-cap companies which enjoy some economic moat, or that are in special situations or in the midst of an unfavourable business cycle, temporarily.
Accuracap – Picopower was launched in October 2011. It has a diversified portfolio of 12-35 high quality companies, chosen with Intelligent Ranking Algorithm. It avoids public sector and IPO stocks.
Accuracap – Picopower was launched in October 2011. It has a diversified portfolio of 12-35 high quality companies, chosen with Intelligent Ranking Algorithm. It avoids public sector and IPO stocks.
Sundaram Alternates - S.E.L.F Portfolio contains 20-30 stocks chosen across multi-sectors from the universe of small-cap stocks, with a market capitalisation of less than Rs 50,000 crore.
Sundaram Alternates - S.E.L.F Portfolio contains 20-30 stocks chosen across multi-sectors from the universe of small-cap stocks, with a market capitalisation of less than Rs 50,000 crore.
The investment objective of Nippon India - Emerging India strategy is to hold a midcap portfolio of high-growth emerging businesses that are existing /potential leaders in their field of operations. It focuses on stocks that are part of rising discretionary spending, domestic manufacturing, new economy and infrastructure revival. Disclaimer: The views and investment tips of experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
The investment objective of Nippon India - Emerging India strategy is to hold a midcap portfolio of high-growth emerging businesses that are existing /potential leaders in their field of operations. It focuses on stocks that are part of rising discretionary spending, domestic manufacturing, new economy and infrastructure revival. Disclaimer: The views and investment tips of experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Dhuraivel Gunasekaran
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