Majority of PMS schemes trail Nifty in FY21

Companies providing portfolio management services (PMS) had a tough time beating the benchmark index in financial year 2020-21 (FY21), and more than half of the schemes underperformed the Nifty 50 index.

Fifty five per cent, or 117 of the 213 PMS schemes, underperformed the benchmark, which gained nearly 71 per cent in FY21, data from industry tracker PMS Bazaar shows. Thirty six schemes provided returns over 100 per cent, with Nine Rivers Capital’s Aurum Small Cap Opportunities (203 per cent), Negen Capital’s 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 benchmarks.

Returns were calculated on a time-weighted rate of return basis for the schemes under consideration. The timeweighted

According to the latest Sebi data, PMS schemes managed ~16.25 trn under discretionary portfolio and ~1.2 trn under non-discretionary portfolio

rate of return eliminates the effects of inflows and withdrawals from schemes to get a clearer sense of the fund manager’s performance.

In March, almost half of the 213 schemes under consideration underperformed the Nifty50, which provided a return of 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 Alchemy’s Ascent (8.2 per cent).

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

The PMS segment invests money on behalf of well-off individuals. The minimum investment that regulations allow is ~50 lakh. It was ~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.