Stocks that top performing PMSes held in their portfolios in Sept

Barring select sectoral and thematic funds, most schemes managed to deliver positive returns. However, only 56 per cent of the schemes delivered Nifty-beating performance during the month.

Invesco’s Caterpillar strategy, which invests in midcap and smallcap businesses, emerged the top performer, delivering 9.97 per cent return, an analysis by PMS Bazaar showed. The fund held stocks like Tata Elxsi, Teamlease Services, Balkrishna Industries, Sundaram Fasteners and Tata Motors, among others.

Green Portfolio’s Dividend Yield strategy, which holds Precision Camshafts, Phillips Carbon Black, CESC, Vedanta and Sterlite Technologies among the top five names, followed closely with a one-month return of 9.93 per cent.

Bellwether Capital’s Long Term Growth, Arihant AMC’s Electrum MIdsmallcap and Karma Capital Advisors’ Long Only India Public Equity were the other top performers, each gaining over 9 per cent.

All these funds, barring Electrum that is yet to complete a year, have a strong long-term track record for the last one year, delivering 70-90 per cent returns. In comparison, Nifty has risen 52 per cent.

Midcap and smallcap stocks outpaced largecap names during the month. But, thanks to that, some analysts believe valuations of many sectors and stocks have become unsustainable. The greatest challenge for fund managers will be to keep performing when the market goes into consolidation or sees a correction.

The country’s biggest hedge fund manager, Avendus Capital Public Markets’ Alternate Strategies, said in 3-6 months, there is a high probability that the market will see a reasonable correction. Some other market veterans have also made similar prophecies. Many money managers, including those managing PMS funds, have started withdrawing cash to prepare for that.

Celebrity PMS fund managers underperformed for another month compared with their lesser known counterparts. However, most PMSes delivered positive returns, though some failed to match their benchmarks.

Sunil Singhania’s Abakkus All Cap Fund holding DCM Shriram, Mastek, Jindal Stainless, Polycab India and Max Financial-was the top performer among them, delivering 4.6 per cent. Basant Maheshwari’s Equity Fund returned 3.85 per cent. Shankar Sharma’s India Super 50 and Saurabh Mukherjea’s Little Champs gained more than 3 per cent each.

Incred Pharma and Kotak’s Pharma focussed portfolios and Trivantage Capital’s Resurgent Financials Equity were the worst performers of the month, declining over one per cent each.

PMS funds are long-term investments, and a month of underperformance may not mean much to them.