Half the PMS schemes trail Nifty 50 in FY21, clutchful offer 100% returns

Returns were calculated on time-weighted rate of return, which eliminates effects of inflows and withdrawals from schemes to get a clearer sense of fund manager's performance

Companies providing portfolio management services (PMS) had a tough time beating the benchmark index in the last financial year, with more than half of the schemes underperforming the Nifty 50 index.

Fifty five per cent, or 117 out of 213 PMS schemes, underperformed the benchmark, which gained nearly 71 per cent in FY21, data from industry tracker PMS Bazaar shows. Thirty six schemes gave returns of over 100 per cent, with Nine Rivers Capital’s Aurum Small Cap Opportunities (203 per cent), Negen Capitals Small Cap Emerging (189 per cent) and Valentis Advisors Rising Star Opportunity (169 per cent) topping the returns chart.

Large-cap PMS schemes (average returns of 56.6 per cent), mid-cap (95.9 per cent), multi cap (69.3 per cent), and small-cap (115.2 per cent) all underperformed their respective category benchmark indices.

Returns were calculated on a time-weighted rate of return basis for the schemes under consideration. The time-weighted rate of return eliminates the effects of inflows and withdrawals from the schemes to get a clearer sense of the fund manager's performance.

In March, almost half of the 213 schemes under consideration underperformed the Nifty 50, which returned 1.1 per cent. Top performers for the month include Nine Rivers Capital’s Aurum Small Cap Opportunities (15.6 per cent), Valentis Advisors Rising Star Opportunity (11.2 per cent) and Alchemys Ascent (8.2 per cent).

As per latest regulatory data from the Securities and Exchange Board of India (Sebi), PMS schemes managed Rs 16.25 trillion under discretionary portfolio, Rs 1.2 trillion under non-discretionary portfolio and Rs 1.75 trillion under advisory.

The PMS segment invests money on behalf of well-off individuals. The minimum investment that regulations allow is Rs 50 lakh. It was Rs 25 lakh earlier. Sebi had increased the amount as part of a larger tightening of PMS regulations. This also included increasing net worth requirements and compliance standards.