The Portfolio Management Services (PMS) industry is a cornerstone for high-net-worth investors seeking tailored investment strategies and superior returns. With an array of schemes spanning multiple asset classes and methods, understanding performance trends is pivotal for informed decision-making.
India's Portfolio Management
Services (PMS) industry has seen remarkable growth, reflecting its rising
appeal among investors seeking personalized and professional investment
management. As per the latest SEBI data, the PMS AUM, excluding the Employees’
Provident Fund Organisation (EPFO) contribution, reached an impressive ₹7.43
lakh crore in September 2024—a substantial 30% increase from ₹5.67 lakh crore
in September 2023. This surge highlights the industry's ability to attract and
manage large-scale investments effectively amidst evolving market dynamics.
The inclusion of EPFO
contributions adds another dimension to the industry, with total PMS AUM
crossing ₹36.28 lakh crore—a growth of 20% over the last year.
The November 2024 PMS performance
report provides a comprehensive view of how various schemes have fared across
key timeframes—1 month, 6 months, and 2 years—offering insights into their
adaptability to market dynamics and efficiency in managing assets under
management (AUM).
Category-Wise Insights
- Multi-Cap
Strategies:
- High
Performers:
- 360
One Asset Management Phoenix PMS: Achieved 42.48% return over 1
year.
- ICICI
Prudential AMC Contra Strategy: Delivered 42.09% over the same
period.
- Low
Performers:
- Concept
Investwell PVT LTD Dynamic: Posted only 6.15% over 6 months and
19.96% over 1 year, indicating weaker returns compared to peers.
- JM
Financial Services Growth and Value: Yielded 6.88% in 6 months and
42.90% in a year, which aligns closer to the category median.
- Small
& Mid-Cap Strategies:
- Exceptional
Performance:
- Accuracap
Dynamo: Noted a stellar 60.32% over 1 year, leading the segment.
- Counter
Cyclical Investments Diversified Long-Term Value: Achieved 48.42%
over a year, demonstrating consistent returns.
- Lagging
Schemes:
- Aditya
Birla Sun Life AMC Select Sector: Provided 53.73% over a year but
struggled in shorter terms with negligible growth in 1-month and 3-month
periods.
- Large
Cap Strategies:
- Top
Performers:
- ICICI
Prudential AMC Large Cap Strategy: Recorded a 50.59% return for 1
year.
- JM
Financial Services Focus: Delivered 42.69% over the same time frame,
maintaining stable performance.
- Underperformers:
- Kotak
Mahindra Asset Management Fintech: Weak returns of 27.17% over 1
year, trailing category averages.
- Flexi-Cap
Strategies:
- High
Returns:
- ICICI
Securities Sterling Aggressive Portfolio: Achieved 40.29% over a
year.
- Green
Lantern Capital LLP Growth Fund: Maintained an upward trajectory
with returns of 74.54% over 1 year.
- Weaker
Results:
- Bonanza
Portfolio LTD Growth: Produced 26.54% over a year, significantly
lower than top-performing schemes.
Performance Based on Period
- Short-Term
(1-3 Months):
- A
majority of multi-cap strategies experienced moderate to negative returns
in the short term, with schemes like Alchemy Capital High Growth
Select Stock (+2.28%) standing out.
- Small
& Mid-Cap funds generally fared better, exemplified by Abakkus
Asset Manager Emerging Opportunities (+8.36%).
- Mid-Term
(6 Months - 1 Year):
- Consistent
outperformance was noted in strategies targeting emerging sectors or
niche markets.
- Centrum
PMS Deep Value IV and Green Lantern Capital Alpha Fund emerged
as top contributors to medium-term growth.
- Long-Term
(2-10 Years):
- Many
long-term schemes demonstrated robust compounded annual returns,
particularly in small-cap and thematic funds.
- AlphaGreP
Investment Multi Factor Quant and Alpha Alternatives Fund Advisors
maintained superior compounded growth since inception.
Key Observations
- Strategies
focused on emerging opportunities (e.g., Accuracap Dynamo, Counter
Cyclical) excelled across all periods.
- Larger
cap-focused schemes showed stability but lagged in growth metrics relative
to small and mid-cap peers.
- Flexi-cap
strategies highlighted adaptability, with significant returns over diverse
timeframes, yet suffered during short-term market corrections.
Analysis of PMS Performance Based on AUM and Returns Across
Timeframes
The November 2024 performance report on Portfolio Management
Schemes (PMS) provides a comprehensive look into the schemes' returns over
varying timeframes—1 month, 6 months, and 2 years—alongside their Asset Under
Management (AUM). This analysis aims to correlate the AUM with performance
trends, highlighting notable schemes, their strengths, and their weaknesses.
1. AUM-Based Performance Analysis
AUM is a critical factor as it often reflects investor
confidence and the fund manager's ability to handle large capital effectively.
However, high AUM can sometimes limit flexibility, especially in small and
mid-cap strategies.
Top Performers (Large AUM):
- 360
One Asset Management Multicap PMS (AUM: ₹4,362.53 Cr):
- Delivered
35.66% over 1 year and 10.75% in 6 months, showcasing its capability to
sustain consistent returns despite a large corpus.
- However,
it faced short-term challenges, with a -5.39% return over 1 month,
indicating sensitivity to market volatility.
- ICICI
Prudential AMC Contra Strategy (AUM: ₹9,469.16 Cr):
- Impressive
42.09% 1-year return and consistent performance over 2 years (31.41%).
- Despite
its size, it remained resilient, proving its efficiency in deploying
large funds effectively.
Analysis Based on AUM - Top Performers (Mid-Sized AUM):
- Abakkus
Asset Manager Emerging Opportunities (AUM: ₹Undisclosed):
- Outstanding
short-term and mid-term returns, with 3.18% in 1 month and 21.88% over 6
months, culminating in a stellar 43.58% for 1 year.
- This
highlights its agility in capturing gains in small and mid-cap
opportunities.
- AlphaGreP
Investment Multi-Factor Quant (AUM: ₹Undisclosed):
- Robust
44.15% return over the past year demonstrates its strategic execution,
though it slightly underperformed over shorter durations.
Underperformers (High AUM):
- ASK
Investment Managers Indian Entrepreneur Portfolio (AUM: ₹15,752.77 Cr):
- Delivered
only 21.51% over 1 year, underperforming compared to peers in the
multi-cap category. Its large size may have hindered its ability to
capitalize on faster-moving opportunities.
- JM
Financial Services Growth and Value (AUM: ₹114.04 Cr):
- Despite
a modest AUM, its returns over the past year (42.90%) were overshadowed
by high volatility, including an 8.27% drop in the past month.
Performance Across
Timeframes- 1 Month, 6 Months & 2 years
Performance varied across the shorter and longer time
horizons, often influenced by fund strategy and market dynamics.
Last 1 Month:
Short-term returns reflected heightened market volatility,
with many schemes recording negative returns.
- Positive
Outliers:
- InCred
Asset Management Healthcare Portfolio: Recorded an exceptional 6.12%,
leveraging sector-specific gains.
- Abakkus
Asset Manager Emerging Opportunities: Gained 3.18%, outperforming
peers in its category.
- Negative
Performers:
- Alchemy
Capital High Growth: Dropped significantly by -8.58%, reflecting its
exposure to volatile market segments.
- Bonanza
Portfolio Multicap: Declined by -7.43%, struggling in a highly
dynamic equity market.
Last 6 Months:
Mid-term returns offered insights into the funds' ability to
navigate market conditions.
- Standouts:
- Electrum
Portfolio Managers Laureate Portfolio: Delivered a robust 27.57%
return, capitalizing on growth in small and mid-cap segments.
- Green
Lantern Capital Growth Fund: Recorded 27.91%, driven by its strategic
allocation.
- Lagging
Schemes:
- JM
Financial Services Growth and Value: Provided only 6.88%,
underperforming its peer group.
- Aditya
Birla Sun Life Core Equity Portfolio: Achieved a meager 2.59%,
highlighting challenges in capturing broader market gains.
Last 2 Years:
The longer timeframe exhibited the impact of compounding and
fund resilience.
- Exceptional
Schemes:
- Counter
Cyclical Investments Diversified Long-Term Value: Achieved 47.97%,
demonstrating consistent and strategic execution.
- Abakkus
Asset Manager Emerging Opportunities: A high 43.59%, validating its
long-term growth strategy.
- Underperformers:
- ASK
Investment Managers Indian Entrepreneur Portfolio: Managed only
12.55%, reflecting challenges in deploying its large corpus effectively.
- ICICI
Prudential AMC Growth Leaders: Though 27.94% is respectable, it
underperformed relative to peers in the same category.
3. Key Observations
- Correlation
Between AUM and Returns:
- Smaller
AUM schemes demonstrated agility in capturing opportunities, particularly
in niche markets such as small and mid-caps (e.g., Abakkus Asset Manager
Emerging Opportunities).
- Large
AUM schemes like ICICI Prudential AMC Contra Strategy showcased
resilience but occasionally lagged in short-term returns due to portfolio
rigidity.
- Sector
and Thematic Strategies Shine:
- Sector-focused
schemes like InCred Asset Management Healthcare Portfolio
outperformed, leveraging concentrated exposure to outperforming sectors.
- Multi-Cap
Strategies Show Versatility:
- Multi-cap
funds like 360 One Asset Management Phoenix PMS and ICICI
Prudential AMC Contra Strategy delivered consistently across
timeframes, reflecting balanced diversification.
Conclusion
With the current market volatility
and the way the returns expectations are changing compared to the last 4 years
one needs to revisit and realign the PMS portfolios. There will be now a significant
change in strategies and stock pickings followed by a change in value v/s growth
models. What has worked for the last 4 years in stock selection might need a
revisit and hence many PMS will find the change in rankings and performance. Your financial advisor is the best person to
guide and help you in deciding exits & re-investments. You will find may PMS who will bleed, particularly
the ones who were aggressive in small-cap and midcap space. Bigger size PMS AUM will take significant
time to reshuffle the portfolio hence all those aspects need to be taken into
consideration. Getting into a call with the CIO or Fund manager would be the
best aspect to decide but don’t buy anything at face value. The deeper you get into the management process
of downfall and beta management you will get clarity.
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