Stocks that helped PMSes focused on smallcaps, midcaps outperform in March

NEW DELHI: Smallcap and midcap-focused PMS schemes outperformed their peers by a vast margin for yet another month, as the equity market favoured smaller names vis-à-vis the larger ones in March.

Nine Rivers Capital’s Aurum Small Cap Opportunities Fund and Valentis Advisors’ Rising Star Opportunity emerged top performers, delivering 15.60 per cent and 11.16 per cent, respectively, data available with PMS Bazaar showed. Their one-year returns were exceptional at 203 per cent and 169 per cent, respectively.

Some multicap PMSes, which have larger allocation to midcap and smallcap stocks, also performed well in March, continuing from the earlier months. That was even when their benchmarks finished largely flat for the month.

Alchemy Capital’s Ascent Multicap Strategy, which has 64 per cent allocation to midcap stocks, delivered 8 per cent return for March and 76 per cent for the last one year. The scheme’s top holdings included Deepak Nitrite, Alkyl Amines, Gujarat Gas, Affle India, KPR Mills, L&T Infotech and CDSL, data available with PMS AIF World showed.

The chemicals sector has been the favourite among many PMS fund managers, and they have delivered well. Saurabh Mukherjea, Founder, Marcellus Investment Managers, thinks Indian specialty chemicals today is where the pharma sector stood in the mid-1990s -- on the cusp of a golden 20-year run.

Among other top performers, NJ Asset Management’s Bluechip strategy with a 60:40 allocation to largecaps and midcaps delivered 7 per cent. The scheme’s top holdings included Tata Elxsi, Supreme Industries, Persistent Systems, Hindustan Zinc and IRCTC.

In comparison, Sensex rose 0.83 per cent, BSE Smallcap Index 2.45 per cent, BSE Midcap Index 1.01 per cent and BSE 500 index climbed 1.19 per cent in the month of March.

“Midcaps and smallcaps have taken the lead because of a sectoral shift from safety to risk in the market. So whether you are buying largecap, midcap or smallcap funds, the fund managers who allocate to cyclical growth sectors will deliver better returns,” said Sunil Subramaniam, MD & CEO, Sundaram Mutual Fund.

“From an investor’s perspective, rather than go and put everything in midcap and smallcap funds, I would say choose the funds, even a largecap one with the right sectoral mix that can deliver very good returns compared with its midcap and smallcap peers,” he said.

Among the worst performers was TCG Advisory’s RAF PMS strategy which had HAL, LIC Housing Finance, RBL Bank, Ashoka Buildcon and PNC Infratech among its top holdings. The PMS delivered about 8 per cent negative return for March. The fund was launched in January first week.

Apart from this, Equirus Securities’ Long Horizon Fund and 2Point2 Capital’s Long-Term Value strategy delivered 5-6 per cent negative returns. The former held Polycab India, Repco Home Finance, Thangamayil Jewellery and Manappuram Finance as top holdings while holding data for the latter is not available.

Some the strategies run by Dalal Street veterans performed better in March than in the last couple of months. Strategies run by Bahar Shah, which manages about Rs 22,000 crore, delivered 3-4 per cent. Saurabh Mukerjea’s Consistent Compounder with AUM at Rs 3,500 crore gained 2.36 per cent, which the India Super 50 Scheme, run by Shankar Sharma, gained 2 per cent.

Basant Maheshwari’s multicap strategy and Helios Capital’s multicap strategy delivered 1.7-1.5 per cent negative returns.