Economic Times, May 8, 2020
A spectacular comeback by the bulls in April helped Indian portfolio managers deliver strong returns to their rich investors. Available data suggests almost all the 147 PMSes delivered positive returns to investors during the month.
Firm global cues, intermittent news flow about the development of a Covid-19 vaccine, significant moderation in FII selling and return of buyers as deep value emerged in several sectors helped pull Sensex and Nifty higher by nearly 15 per cent in April.
Kotak’s Pharma PMS scheme (up 26.10 per cent), Equirus Securities’ Long Horizon Fund (up 24.38 per cent) and Green Portfolio’s Special scheme (up 19.72 per cent) emerged top PMS performers of the month.
Pharma stocks hogged limelight in April as Covid-19 outbreak significantly increased demand for generic and branded drugs. Nifty Pharma index advanced 30 per cent during the month.
Ambit Capital’s Emerging Giants, ICICI Pru’s Largecap Portfolio, Solidarity Advisors’Prudence, Marcellus’ Little Champs and Crest Wealth Management’s Emerging Bluechip gained 17-19 per cent.
Top AUM schemes
In terms of asset under management, ASK’s Multicap IEP scheme with Rs 9,730 crore asset under management delivered 11.10 per cent returns, while Motilal Oswal’s NTDOP and ASK’s India Select gained 9.35 per cent and 11.20 per cent, respectively, during April.
Speaking at the ETMarkets Investor Conference on May 1, market veteran Bharat Shah, Executive Director of ASK Group, said cheaper stock prices do not mean things cannot get worse and stocks can’t ..
He said there is a real margin of safety in the market currently, as stock prices have fallen below underlying values in many high-quality businesses, which have quality managements and strong balance sheets.
“If an investor has a 3-5 year view and capital to invest, good balance of mind, knowing well that things can go worse, this is a fantastic time to invest if one can live with the stress and select quality well,” Shah said.
Among the largecap and midcap categories, Acepro Advisors Largecap strategy, Nippon India’s Absolute Freedom, Bonanza’s Growth, Right Horizons’ India Business Leader gained in excess of 15 per cent during the month in line with 15 per cent Sensex return.
Among the midcap-oriented PMSes, Right Horizon’s Super Value, Concept Investwell’ Marvel, Ambit Capital’s Good and Clean, Invesco’s Caterpillar and Phillip Capital’ Emerging India delivered between 12 per cent and 14 per cent returns.
With over 15 per cent gain, Ambit Capital’s Emerging Giants, Marcellus’ Little Champs, Right Horizons Minerva India, JHP Securities’ Incredible India, Crest Wealth Management’s Smallcap, Nine Rivers Capital Aurum Smallcap emerged top grossers in the smallcap space.
In the multicap space, Anand Rathi Advisors Impress PMS, ICICI Pru Contra Portfolio, Nippon India’s High Conviction, First Global’s India Super 50 delivered over 15 per cent.
Last 1-year performance
Among 132 of the 147 sample schemes with a history of one year or more, just 11 have managed to deliver positive returns for last one year, PMSBazaar data showed. They included Marcellus’ Consistent Compounder, Kotak’s Pharma, Anand Rathi Advisors’ MNC PMS, Ambit Capital’s Coffee Can, Stallion Asset’s Core Fund, IIFL’s Multicap Advantage, Pelican’s Pelican PE Fund, Sanctum Wealth’s Smart Solutions.
April was a tough month for portfolio managers as the market rebound was sudden and steep, says Sanctum Wealth Management. “While news flow across the world continued to be gloomy, market movements did not reflect the same,” he said.
Sanctum had increased cash position in in two portfolios in February to protect capital in the uncertain times caused by the spread of Covid-19.
“We continue to maintain high cash levels in both portfolios. The high cash position has hurt us in the short term as the move in market-up was steep in April and we could not participate completely in the rally,” the PMS manager said in a report.
It said the PMS increased allocation to defensives like pharma, consumers and non-lending financials, as these companies are likely to be impacted less by the Covid disruption