Mid, smallcap-focused PMSes played catch up with largecap peers in Oct amid tax cut-fuelled rally

NEW DELHI: The corporate tax cut that the government announced late September took Dalal Street by surprise, and ensured a 5 per cent leap in the benchmark indices in October.

This helped PMSes, schemes run by leading portfolio managers and boutique wealth management firms managing wealth of the ultra-rich, put up a solid show for October.

While largecap-oriented PMSes generally did well, even those focussed on midcaps and smallcaps played catch up.

Across categories, one out of every 10 PMSes delivered over 5 per cent return for the month, as four out of 10 BSE500 stocks (219 in total) delivered returns ranging from 5 per cent to 69 per cent.

Out of the 106 sample schemes across categories, 35 delivered zero to 3 per cent return while 11 gave negative returns. This compared with a 4.95 per cent rise in Nifty Midcap 100, index, 3.5 per cent rise in Nifty and 2.94 per cent rise in BSE Smallcap index.

Most largecap schemes performed well. Among them was Ambit Coffee Can, which delivered 4.9 per cent return for the month and 27.80 per cent for last one year, to emerged the best among its peers.

ICICI Prudential Large Cap Portfolio’s 4.67 per cent return for the month was also healthy. This fund has delivered 11.87 per cent return for last one year against a 14.3 per cent rise in Nifty.

Accuracap Alpha 10 scheme performed in line, with 3.54 per cent return.

Among 55 multicap PMSes, 32 failed to match the 3.8 per cent average return that Nifty, Nifty Midcap 100 and Nifty Smallcap indices gave for the month.

ASK India Entrepreneur Portfolio, which manages Rs 10,262 crore in assets, delivered 1.8 per cent return for the month against BSE500’s 3.1 per cent rise. This PMS has risen 13.8 per cent in last three months and a solid 19.4 per cent in last one year.

Motilal Oswal’s NTDOP that manages Rs 9,306 crore in assets delivered 2.99 per cent return while Alchemy’s Rs 3,411 crore scheme, Select Stock, rose 2.9 per cent.

Alchemy Select Stock, ICICI Prudential Contra PMS, Aditya Birla SSP and Accuracap Alphagen all delivered less than 3 per cent.

In contrast, Saurabh Mukherjea’s Marcellus Consistent Compounders gained 5.4 per cent in assets. This fund delivered 22.5 per cent return in last six months compared with Nifty’s 1.10 per cent expansion.

Buoyant Capital Opportunities Multi-Cap, Asit C Mehta’s Ace Multicap, Tamora’s TIOS Ask Growth Strategy and ICICI Prudential Flexicap Portfolio added between 5.1 per cent and 6.6 per cent to investor wealth.

From a sample of 11 pure smallcap PMSes, only Edelweiss Focused Small Cap delivered 4 per cent returns, while others failed to match the return of BSE Smallcap index.

Accuracap Dynamo and Care PMS Growth Plus Value were two schemes that logged negative returns of 3.74 per cent and 3.6 per cent, respectively.

Rights Horizon’s India Under-Served and IndiaNivesh’s SPROUT scheme fell between 1 per cent and 3 per cent, data compiled by PMSBazaar suggested.

Among midcap (and mid & smallcap) schemes, none of the 11 sample schemes managed to beat Nifty Midcap’s 4.95 per cent return. Tata PMS’ Emerging Opportunities delivered highest return at 4.10 per cent, followed by Nippon India’s Emerging India (up 3.20 per cent) and Invesco’s Caterpillar (up 2.94 per cent).

“In last one decade, only 75 companies were able to transform from midcaps to largecaps,” Hiren Ved of Alchemy Capital Management, recently told ETNOW in an interview.

“So, when you want to invest in smaller and mid-sized companies, you have to be extremely careful. The current environment is a little hostile for such companies,” he said.