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PMS Tracker: Top 15 funds gain up to 16.5% in May; Elever, Axis strategies lag

PMS Tracker: Top 15 funds gain up to 16.5% in May; Elever, Axis strategies lag

Economic Times12-06-2025
Bottom performers: Elever, Aequitas, Axis strategies underperform
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At least 15 PMS funds across smallcap, midcap, and multi-cap strategies delivered solid gains in May 2025, with Money Grow Asset's Small Midcap strategy emerging as the top performer with a 16.5% monthly return, according to data from PMS Bazaar.NAFA Asset Managers' Clean Tech Portfolio followed closely with a 16% return. Negen Capital's Special Situations and Technology Fund gained 15.35%, while Nine Rivers Capital's Aurum Small Cap Opportunities returned 14.4%. Samvitti Capital's PMS Aggressive Growth strategy also featured prominently with a 14.39% return in May.Ambit Investment Advisors' Emerging Giants strategy posted a 14.29% gain, and Waya Financial Technologies' Bin73 Sunrise Alpha, a new entrant in the small and midcap segment, rose 14.14%. Anand Rathi's Decennium Opportunity strategy returned 13.91%, while Bonanza Portfolio's Multicap fund and Accelt's Long Term Equity Fund gained 13.87% and 13.80%, respectively.Other funds in the top 15 include portfolios managed by Samvitti Capital, ithought Financial, Master Portfolio Services, and Tulsian PMS, each delivering monthly gains of over 13%.While many strategies posted double-digit gains, a few funds underperformed during the month. Elever Investment Adviser's Factorshields PMS was the biggest laggard, slipping 0.91%, followed by its Factoralpha PMS, which declined 0.58%.Aequitas Investment Consultancy's India Opportunities Product lost 0.33%, while Axis Securities' AlphaSense AI strategy declined 0.30%. Invasset's Growth Pro Max fell 0.26%, and Kotak Mahindra AMC's Pharma and Healthcare strategy was down 0.23%.Other funds with relatively muted performance include Profusion Investment's Income Enhancer (up 0.11%), PRPEdge Wealth's Alphaa Better Risk Reward (up 0.13%), and Agreya Capital's Multi-Asset Enhancer (up 0.21%).In May, the performance gap among PMS strategies was wide, with high-beta smallcap and thematic strategies staging a sharp rebound, while select sectoral, quant-based, and hybrid portfolios struggled to keep pace.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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Specialised Investment Funds can offer retail MF investors access to PMS-type investing but should you rush in?
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The stocks we held one year may not be the stocks we are holding the next year, or maybe holding them in different proportions, simply because the feedback from the system that we have built is to change or to reduce or increase the size of some stocks in their portfolio. So that's the core approach of the Flexicap Fund. We don't change the stocks based on the conviction we have in those stocks. We have the conviction in the process. The process drives them out because something better has come. And that's the process, you have to follow it. One of our core principles is that we don't fall in love with our stocks. There's no reason for me to say, I like this stock, don't worry, it's going through a bad time. Go through a bad time—I don't have a problem with that. Just come back up when you're ready, and we'll be your friends again. I don't have a marriage to the stocks we own. And therefore, I have no problem walking away from them if they don't meet my criteria. In more subjective portfolios, you'll find this is a very difficult decision. It's a very easy decision for us. Of course, there will be some layer of discretion where we do specify certain things we do not like — such as the corporate governance issues, the number of times auditors have been changed, etc. Actual selection is based on a ranking of stocks following the criteria we have opted for. We have a number of factors we choose from — the primary factor is momentum, which is in good times, in trending times, we will buy stocks that are in momentum. We have another proprietary indicator of sorts that we have built internally, and it tells us when markets are either uptrending, have no trend at all or are downtrending. So, we have different approaches for each. You can always tweak a flex-cap scheme according to your convictions, irrespective of whatever the market scenario is. When markets go down, generally, everything goes down. So you can have conviction on whatever you want, you're going to lose money. That's for sure! The idea is to lose a little bit less when you lose money, when the markets are down and make a little bit more when the markets are going up. So a flexi-cap fund gives you that kind of advantage. The core attribute of this fund is the flexibility that it allows you. You don't have to worry about the market cap because you don't have limits concerning that. So it gives you that flexibility, which is the most useful for a fund manager to be able to harness their entire potential. We will do other types of funds at some point. If we do those other types, we will have strategies that will kind of be adapted towards those restrictions. It's not like large-cap funds are bad or small-cap funds are bad. It's just that this particular strategy is built for the widest possible audience, the widest possible selection of portfolios. The others may be restricted. So, our strategies will have to change accordingly. We've learned a lot during the process of managing wealth for HNIs. And to be honest, HNIs are not very different from retail. Everybody in the end is afraid of losing money. Everybody in the end is happy when they make money. Regardless of whether you're an HNI or an individual, you're always the same. The only difference is the risk-taking capabilities, perhaps. But some HNIs do not want high risk. They are more FD-type investments. There are enough retail people who can take significant amounts of risk, but they don't have the 50 lakhs that are required to become a PMS customer. So you want to address the customers who can take that risk at one layer. That's a flexicap fund for you. As we have seen, it's the retail market that has at least gone up significantly in the last four or five years, where they have not only demonstrated the ability to take risk, but they've changed behaviour. When markets go down, they add more money. So they are not only risk aware, they are actually acting actively on their risk. Even though last year, the market did not do anything, we've seen increasing SIP counts and increasing SIP volumes in terms of number of crores; there are 27,000 crores plus per month in SIPs alone. And most of these SIPs are retail. Next is access to various markets, which is not available in a PMS at all. For instance, you can't access foreign markets, but mutual funds can, although with some restrictions. We can buy gold through a mutual fund, or we can create a debt portfolio, which is very difficult for HNIs, because even though the HNIs are called HNIs, the minimum size in most debt markets is either 5 crores or 25 crores per order. That means if I make an order of 5 crores, I have 10 HNIs that I can distribute it to. And for 25 crores, I need even more. And that's assuming 50 lakhs per HNI, and nobody wants all their money in one stock or one bond. So I have to buy a portfolio of bonds, and then I need hundreds or thousands of customers, because you have to allocate it to every individual customer—it's not a pool. A mutual fund is a pool. So it allows even the smallest investor, with ₹ 5,000, to get exposure to government bonds, which otherwise trade at ₹ 5 crores a pop. Your ability to access markets through a pooled vehicle like a mutual fund is much, much easier. It's not even possible in a PMS or HNI approach. The last bit, of course, is the taxation. If they own stocks directly, they pay dividend tax on whatever dividends they receive. If they buy and sell their portfolio in the middle of the year, and they're actually planning to use the money to buy another stock (so they're not even taking the money out), the government still taxes them. A mutual fund approach is easier in that sense. So it's very useful to invest in them and hold your money for 30 or 40 years. When you take the money out after that, you'll be taxed, but at least you're not taxed in the intermediate phase. You're exempt at accrual—you're accruing gains, but not being taxed on them. In the short term, I have no idea where the market would go. We have not seen a 30% downturn since COVID. The previous 30% drop before COVID was in 2013. But if you look at 2002 to 2007, there were at least five to seven drops of more than 30% in the Nifty 50 index. But 2002 to 2007 was a ridiculous 5x return on the index itself. So, we saw a lot of volatility then. Right now, this year, we saw an 18% drop from the top, which is nothing. So, I feel that markets have not demonstrated the kind of volatility that they generally should for too long. People are kind of complacent about it. We should expect that volatility will return at some point. I feel markets, over the next three to five years, we're in a very interesting position where lots of good things are happening and are in our favour. For instance, the West is dealing with debt problems. Our government debt to GDP in general is very, very low. It's lowering because they're spending a lot less and earning a lot more. So, government finances and their need to crowd out the private sector have reduced quite substantially. Second, the Indian GDP per capita has just about reached $2,800 or so. This is pretty much when the time comes where people start to get discretionary income enough as a country to be able to spend on stuff that is not absolute necessities like food and clothing, and shelter, which is why you're seeing the relatively more affluent, who have much more disposable income, spend as much as they can. There's too much traffic. The malls are full. Restaurants are full. You can't get bookings. All of this stuff in urban cities is also now translating to tier two and tier three, where it was unheard of before. So, the consumption patterns are changing from absolute necessities to discretionary spending. And the next three or five years will see an increasing growth. Meanwhile, the government can now dedicate more resources to stuff that we would have earlier imported. So defence, for instance, or infrastructure. A lot more Indian companies are able to meet these needs today than they were about five years ago. Given where India is today, the next three to five years will be very interesting. We're likely to see increased consumer spending and companies investing in assets to meet that demand. For example, when people start demanding more, you suddenly see new restaurants opening, more aircraft being bought, or state and private bus operators expanding fleets. This increase in spending forces companies to invest in capex—and that's an ongoing process. It's been slow, but now demand has reached a reasonably high level without prices going up meaningfully. Core inflation is around 4.5%, and if you exclude food and fuel, overall inflation is about 2.1%. So the economy is in a much more stable place than it used to be. This, I believe, is the direction markets will follow—driven more by domestic investment. Our reliance on foreign capital has decreased. For the first time since 2002, foreign holdings have dropped below the combined holdings of domestic retail and mutual funds. That's a major shift. There's also a greater appetite for risk, for new sectors, and new ideas. People aren't investing based on surnames anymore. They're looking at what companies do—how they're changing lives. And investors can participate in this growth, directly or through mutual funds. As for specific market targets like Nifty or Sensex by year-end—I don't have one. What matters is whether there are fundamental shifts—and there are. India is moving from a saving economy to a spending economy. There's more discretionary income, premiumisation, better infrastructure, and rising financialisation. So when it comes to investing, we believe in a philosophy called "win at life." Don't invest just to make money. Invest to do something with that money—whether it's for your child's education, your retirement, or a trip you've always wanted to take. Match your investments with your goals and time horizon. Once you define your goals and allocate for them, the rest is yours to enjoy today. That frees you from constantly worrying about market ups and downs. You don't track your gold price daily or the value of your house—treat long-term investments the same way. Volatility isn't always a risk—it's an opportunity if you don't need the money immediately. Over short periods, equity returns are unpredictable. If your horizon is six months, don't even look at Nifty levels—put your money in the bank. But over 10 years, history shows the odds of success in equity rise significantly. There are definitely sectors we find interesting, though I want to clarify that this has nothing to do with the flexicap portfolio. That said, certain ideas that I find compelling are semiconductors, defence, stocks around the consumption theme and its premiumization, which includes sectors like tourism, hospitality, and transportation. All of these areas are moving up in general in the economic fashion; I'm not talking about the stock prices but about the fact that they're generating more and more profits every year, so they seem to be one of those sectors which are interesting. Financialization, in general, I find a compelling theme. The financial architecture of India is changing quite dramatically - a lot more people are investing in financial assets compared to real estate and gold. That tip happened over about two years ago; now we continue to have more and more investments happening in the financial area whether it is fixed deposits, insurance, stocks or mutual funds. Infrastructure, in general; road, rail, airports, lots of things here that have potential because a lot more investment. I think international investing is fine because there are great companies everywhere in the world. Sometimes, some of those companies present opportunities which India does not, for instance, AI. Foreign companies are leading that space. One should look at diversification abroad and have some diversification because anything can happen in any country. You can have some kind of 'a foot outside' sort of portfolio, but it usually requires your portfolio to be a certain size before you can do that. If you start with like 10,000 rupees, I will not tell you to invest a thousand rupees abroad because one transaction to send money abroad costs 800 rupees; so you're left with 200 rupees to invest. That's inefficient. So once your portfolio reaches a meaningful size, it makes sense to allocate a portion internationally. Until then, India has enough to offer. Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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