Not a rich deal! Woes spilled over for most PMS alpha chasers in May

Top portfolio managers sweated it out on Dalal Street to generate alpha for their wealthy clients all through May.

Data showed just seven schemes managed to deliver over 1 per cent return to investors for the month as Nifty again consolidated after rallying nearly 15 per cent in April.

With a 3.62 per cent return, ICICI Prudential Largecap Portfolio emerged as the top gainer in May. It was followed by Kotak’s Pharma (up 3.40 per cent) and ICICI Prudential’s Contra Portfolio (up 3.24 per cent).

Tata Consumer Products, Wipro, Ambuja Cements, ICICI Bank, NTPC, ACC, Bharti Airtel, Hindalco and HDFC Bank were among the top holdings of ICICI Prudential Largecap, whereas Kotak’s Pharma strategy’s key plays included Sun Pharmaceutical, Dr Reddy’s Laboratories, Aurobindo Pharma, Divi’s Laboratories and Lupin. This strategy aims to capture the opportunity in pharma and healthcare-related stocks.

“The regulatory overhang is turning favourable for the pharmaceutical sector, and that has created hopes of earnings recovery going forward,” Anshul Saigal, Fund Manager, Kotak Portfolio Management Services, told ETMarkets.com in an earlier interaction.

“Pricing pressure is behind for the sector. Valuations are looking highly attractive after five years of underperformance. The sector is likely to attract lots of investment due to Covid-19 pandemic. We believe pharma is getting re-rated,” Saigal said.

Equity benchmarks Sensex and Nifty declined over 2.50 per cent each in May, amid growing uncertainty over the coronavirus pandemic and its impact on the economy. The BSE Midcap index slipped 1.42 per cent during the month and the Smallcap index 1.88 per cent.

The Multicap Growth Portfolio scheme, run of Credent Asset Management, gained 1.80 per cent in May. Nine Rivers Capital’s Aurum Smallcap Opportunities, Equirus Securities’ Long Horizon Fund, Valcreate Investment Managers’ Growing India managed returns of around 1.5 per cent.

Basant Maheshwari Wealth Advisers’ Equity Fund, met with the biggest disappointment among the 157 top schemes. The fund witnessed 13.92 per cent wealth erosion, data collated by PMSBazaar showed.

Trivantage Capital Management’s Resurgent Financials Equity (down 8.60 per cent) and Super Six (down 7.60 per cent), Lake Water Advisors’ Lake Water (down 6.21 per cent), Nippon India’s Emerging India (down 5.90 per cent) and Tata PMS’ Blue Chip (down 5.35 per cent) were the other major losers on the performance chart.

Marathon Trends’ Megatrends portfolio also lost 4.52 per cent during the month, while First Global’s India Super 50 and India Multi Asset fell 4.59 per cent and 1.06 per cent, respectively.

Kochi-based investor Porinju Veliyath’s Equity Intelligence India PMS witnessed a 3.65 per cent fall, Sebi data showed.

“The darling sectors six months back — banking, financials —have definitely fallen out of favour and that is the reflection of what is happening in the economy. Companies and sectors are getting rerated. There is a new normal and you can see where we are,” Atul Suri, Founder & CEO of Marathon Trends, told ETNow during a recent interaction.

Suri said pharma, telecom and consumer stables looked interesting to him.

With over half a per cent returns, Anand Rathi’s Impress PMS, Invesco’s Rise, Silverarch’s India Equity Portfolio, PGIM India’s Phoenix, Valcreate’s Life Science, Accuracap’s Pico Power and Satco Capital Market’s Growth and Momentum were among other strategies that managed to outdo the benchmark equity indices in May.