PMS schemes that gave more than 50 percent return include Nine River Capital’s AURUM Smallcap theme that delivered nearly 95 percent return in the last six months.
When India was grappling with lockdown to avoid the spread of COVID-19,
portfolio managers used the dip in March to stay with possible winners
of the ‘Unlock’ scenario in the small & midcap space.
Indian market might have rallied by about 30 percent in the first six
months of the current financial year, but as many as 80 Portfolio Management
Schemes (PMSes) outperformed the index and 20 of them rose 50-100% in the same
period, according to data from PMSBazaar.com.
PMS schemes that gave more than 50 percent return include Nine River
Capital’s AURUM Smallcap theme that delivered nearly 95 percent return in the
last six months. Top holdings include stocks like Intellect Design, Poly
Medicure, CDSL, Astra Microwave and Alkyl Amines Chemicals.
Aurum Small cap opportunities strategy is built out of 12-15 high
conviction small-cap stocks with a market-cap of more than Rs 2,500 crore and
an investment horizon of 3-5 years for each stock.
The other PMS schemes which rallied more than 50 percent include Equirus
Securities Long Horizon Fund. The fund focuses on making concentrated bets for
the long term, in high quality publicly listed Indian companies at reasonable
valuations.
Newgen Capital’s Smallcap Emerging Fund, and ACCURACAP PICOPOWER
Smallcap fund delivered more than 70 percent returns each in the last six
months.
Centrum Multibagger which is a Midcap focussed fund gave over 60 percent
return in the last six months. The strategy focuses on buying value stocks in
the Midcap space to create value over the long term compared to its benchmark
BSE500.
The top holding of this fund includes Granules, APL Apollo, Vaibhav
Global, and Astral Poly Technik Ltd etc. among others.
Will the rally continue in small & midcaps?
The large part of the outperformance came from the PMS schemes which
invest primarily in the broader market space. Money managers are looking for
growth and after 2 years of underperformance - small & midcaps are ready to
shine, suggest experts.
With the government focussing primarily on the Make in India initiative,
small & midcaps are more economy-linked companies and do well when the
economy does well.
The initial part of outperformance which we have seen can be attributed
to liquidity, but experts feel that staying invested in companies where growth
outlook remain string could turn out to be wealth creators.
“As long as the market rally is driven by liquidity, small & midcap
stocks will continue to underperform. Clear visibility of earnings improvement
is of utmost importance for small & midcap stocks to outperform from hereon
or even sustain this rally,” Arjun Mahajan Head Institutional Business at
Reliance Securities told Moneycontrol.
“Few indicators such as improvement in power demand, credit card bills,
e-way bills, railway freight, etc give an indication about possible earnings
recovery, prudent investors may take a while to confirm the sustainability of
this recovery,” he said.
Mahajan further added that we can essentially say that a strong rally of
small & midcap is very much on the cards if backed by the sustained
economic recovery.
Source - Moneycontrol.com
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