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Ultra rich stay invested in PMS schemes while equity MFs are clocking net outflows every month

Every second portfolio management scheme (PMS) has outperformed the Nifty in February.

Portfolio Management Services (PMS) outperformed the broader market by a wide margin thus reducing investment risk during February even as the equity benchmarks went on a roller-coaster ride stretching valuations of frontline stocks.

If this trend takes hold among investors, it may well mark the beginning of a fresh churn in the wealth management space with rich investors shifting to portfolio managers to supervise their money.

According to data compiled by, a private research firm that tracks around 190 PMS schemes on a real-time basis, when the broader market benchmark Nifty closed February with a moderate gain of 6.6 percent, top PMSs raked in positive returns ranging from 15 percent to 20 percent thus beating the broader market by a hefty margin.

“Every 2nd PMSs with a deft strategy has beaten Nifty’s 6.6 per cent jump in February,” the research firm said in its latest note adding “The spotlight was on small cap-mid cap strategies that outshined large caps. Holding in smaller companies rose in value as investors took advantage of cheaper valuations. Top PMSs generated 15% to 20% this month (February) outperforming benchmark indices by a hefty margin.”

Notably, eight out of the 10 best-performing PMS schemes fell under the small and mid-cap categories.

“This is because the weakness in the market was led by large caps but small and mid-caps were not that much impacted,” the firm added in its note.

The five best performers for February are Right Horizons Super value up by 21.74 percent, Roha Asset Managers Emerging Champions up by 20.15 percent followed by Valentis Advisors Rising Star Opportunity, Centrum PMS Multibagger, and Good to Great.

Experts say a bevy of factors including deft stock picking and a shift to small and mid-cap success stories seem to have helped portfolio managers to deliver market-beating returns during a period marked by a wild ride in stock prices.

“Our strategy is not to sell winners at every market turn but to drop laggards in our portfolio. We keep investors’ engaged on a real-time basis to grow their portfolio exponentially,” said K Dileep, Senior Investment Strategist (PMS) at Geojit Financial Services. “This may also explain why ultra-rich stay invested in PMS schemes while equity MFs are clocking net outflow every month”.

He said Geojit’s Advanced Portfolio delivered an excess return of 42.49 percent on a one-year scale compared to Nifty Midcap 100’s return of 36.62 percent for the same period.

Anil Sarin, CIO- Centrum PMS said, “However, a note of caution is in order here since a bull market lifts all stocks, some lesser quality stocks also perform better only to fall sharply at the first signs of market weakness. As such we recommend that investors do their homework and choose wisely.”

According to him, Centrum ‘Deep Value’ portfolio comprising mid-cap and small-cap stocks has delivered more than 20 percent annualized returns (net of fees) over the past eight years.


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