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    How the high and the mighty got hit! 94% PMSes fail to log returns in Feb

    Synopsis

    Marcellus’ Little Champs and Sundaram AMC’s SISOP stood out, with 3.90% and 1.70% returns.

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    Motilal’s Focused Midcap also managed to tide over the volatility.
    The bears on Dalal Street have spared none. The high and the mighty, too, is bleeding through his nose.

    Almost all of Dalal Street’s top money managers of high-net worth individuals failed to deliver positive returns in February.

    The 30-share BSE Sensex cracked 5.96 per cent during the month, while BSE Midcap and Smallcap indices plummeted 5.57 per cent and 6.54 per cent, respectively, as fears of coronavirus spread gripped markets.

    Data available with PMSbazaar for 125 portfolio management schemes (PMSes) showed Asit C Mehta Investment’s Ace Multicap strategy declined the most at 11.70 per cent during month, followed by Choice Portfolio Management’s New India Strategy (down 9.79 per cent), Motilal Oswal’s IOP V2 (down 9.35 per cent) and JHP Securities’ Incredible India (down 9.26 per cent).

    As many as 94 per cent of the PMSes failed to deliver any positive return for the month.

    Marcellus’ Little Champs and Sundaram AMC’s SISOP stood out, with 3.90 per cent and 1.70 per cent returns, respectively.

    Saurabh Mukherjea, Founder and Chief Investment Officer, Marcellus Investment Managers, said his fund has been focused on companies that grow at a sustainable pace while maintaining a healthy level of capital.

    “Sustainable pace means the company should be getting double-digit revenue growth every single year. This is regardless of the GDP cycle. Besides, the company should have a return on capital of at least 15 per cent, which is the cost of capital in India,” he explained.

    Motilal Oswal Financial Services in a report said the benchmark indices mirrored the slide in the global markets in February on the back of reports of coronavirus spreading beyond China.

    Motilal’s Focused Midcap also managed to tide over the volatility. The scheme along with Tamohara Investment’s TLES, White Oak Capital Management’s India Pioneer Equity and Ambit Capital’s Emerging Giants delivered marginal returns between 0.10 per cent and 1.50 per cent.

    “While the Six Sigma event of coronavirus outbreak has both economic and political implications, the exact nature and quantum of the same are difficult to forecast. Global growth and trade might deteriorate further if the current situation persists or escalates further. Although India is predominantly a domestic consumption-driven economy, its trade inter-linkages with the world and integrated supply chains in several sectors bring in an element of risk,” Motilal Oswal Financial Service said.

    Among other notable portfolio management services, a PMS run by Kochi-based investor Porinju Veliyath-led Equity Intelligence witnessed an 11.80 per cent fall.

    In contrast, a scheme run by Kolkata-based Basant Maheshwari-led Basant Maheshwari Wealth Advisors gained 0.74 per cent, SEBI data showed.

    In his recent tweet, Veliyath said, “End of correction or are we in a bear market? As a badly affected fund manager, value investing in small/midcaps, the only solace for me in this carnage is the hope that this would end the skewed valuations. The recovery, I believe/hope, would be a broadbased one!” he said.
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    The Economic Times