Among the PMS strategies, minnows from the smallcap segment trounced their better known peers for another month, outlining that all that matters on Dalal Street is picking the right stocks at the right time.
Right Horizons’ Minerva India Under-Served, which held stocks like
, , , PVR and , emerged top performer, rising nearly 23 per cent in a month. This was nearly four times the return that BSE Smallcap Index delivered in July.
India Opportunities Product from Aequitas Investment Consultancy, Growth Fund by Green Lantern Capital, Bonanza’s Value and ICICI Prudential’s Pipe Strategies were other top gainers, delivering 13-15 per cent returns for the month, according to data compiled by PMS Bazaar. All these funds are largely focussed on smallcap stocks, which have been the flavour of the season.
Fund managers and retail investors have binged on smallcap stocks in the past few months, taking them to new highs. This has also raised worries of some sections of investors, who believe things can fall apart hurting them.
Anand Shah, who manages ICICI Prudential’s Pipe portfolio and held stocks like Godawari Power and Ispat, Sarda Energy, UTI AMC, Vardhman Textiles and Federal Bank, said some pockets of the market are overheated, but there are ample bottom-up opportunities.
“There are industries where actually there is a good tailwind of earnings, and at the same time valuations are fairly reasonable. We are more overweight on those businesses particularly in manufacturing, banking and financial services where the valuations are reasonable and earnings support is significant,” said Shah, adding he sees significant opportunities in textiles and chemicals sectors now.
PMS strategies run by some of the renowned names like Bharat Shah, Sunil Singhania, Saurabh Mukherjea, Shankar Sharma and Sameer Arora, who largely operate in the multicap segment, also managed to beat their respective benchmarks.
Abakkus Emerging Opportunities, co-managed by Sunil Singhania, delivered over 10 per cent returns in July, thanks to its investments in Saregama,
, , Jindal Stainless Hisar and Mastek among others. His fund was the only one delivering double-digit returns among the names mentioned above. Rest delivered 2-8 per cent.
Please keep in mind that most of these strategies are built to deliver long-term returns, so outperformance or underperformance in the short term may not matter much. In the one-year period, many of them have delivered 30-60 per cent returns, which place them in the lower half of the high performers.
A few PMS strategies offered negative returns during the month, when the broader market trend was moving upward. Right Horizons’ Alphabots Indis Prime, which is focussed on energy and financial services, dipped 1.3 per cent while Marcellus’ Kings of Capital and Asit C Mehta’s Ace 50 strategies were among the schemes that delivered negative returns.
