Some money managers for rich investors delivered robust alpha to their high net-worth clients in financial year 2023-24 when the benchmark Nifty 50 TRI index gained 30.08% and the BSE 500 TRI advanced 40.16% during the year.
Data collated by PMS Bazaar showed that at least 111 PMS strategies gained more than 50% in the last 12 months. Three strategies gained more than 100%. Invasset LLP’s Growth Pro Max strategy emerged as the top gainer on the chart, delivering a 128.47% return to HNIs in the previous financial year. Green Lantern Capital LLP’s Growth Fund and Asit C Mehta Investment Interrmediates’s ACE-Multicap also surged 110.79% and 102.73%, respectively, in FY24.
Sharing his views on the outperformance Invasset LLP’s Growth Pro Max, Anirudh Garg, Partner and Fund Manager at Invasset said, “We follow four distinct styles of investments (value investing, growth investing, quality investing and the safety shells) designed into our Invasset AAID (Advanced Algorithm for Investment Decisions) model to cater to dynamic market conditions. This is called as the Invasset AAID shifter which helps us with step-by-step guidance to check in which stage the market is pivoting to so that we can proactively make prudent decisions for our valued Investors.”
He further explained that in value investing they seek out industry leaders who have been unduly affected by market downturns, causing their stock prices to fall below their intrinsic value. “Drawing inspiration from the methodology pioneered by Benjamin Graham, we aim to purchase these stocks at a bargain and sell them when their value surpasses the market’s assessment,” Garg said adding they also focus on identifying companies that have recently experienced favourable tailwinds.
The money manager also highlighted that in times of market exuberance and unsustainable levels reminiscent of a bubble, they prioritise the protection of investor capital through hedged portfolios. “By adopting a defensive stance, we aim to shield against downside risks and navigate through volatile market phases with a focus on capital preservation,” he said.
Commenting on the performance of Asit C Mehta Investment Interrmediates’s ACE-Multicap, Prasanna Pathak, Director, Asit C Mehta Investment Interrmediates said, “Our primary investment aim is to provide the best risk-reward ratio to our investors, recognising that equity inherently carries high risk. We’ve devised the Scientific Investing Framework to accomplish this goal, employing quantitative techniques to mitigate portfolio risk.
Additionally, we use fundamental and qualitative methods through vector-based investing strategies to enhance returns. The composite investment framework helps us identify mispriced stocks and hidden investment themes. Identifying a theme at the take-off stage is the key to generating supernormal returns. We could identify themes like capex-cycle, defence, railways and PSU which is reflected in the significant outperformance of our schemes.”
Samvitti Capital’s PMS Active Alpha Multicap (up 98.40%), Asit C Mehta Investment Intermediates’ ACE-Midcap (up 95.58%), Ambit Global Private Client’ Alpha Growth (up 94.80%) and Carnelian Asset Management and Advisors’ YNG Strategy (up 92.64%) stood among other major movers. Categorywise, multicap, flexicap, smallcap and midcap focused strategies emerged as the top gainers in FY24.
Prabhakar Kudva, Director and Portfolio Manager, Samvitti Capital said, “Active Alpha Multicap strategy is to look for changes in earnings tailwinds or change in perception of earnings over the next 4-6 quarters. Then we build a basket of such opportunities and review them periodically. The return has been a function of three things that is the overall market performance, the overweight stance to mid and small caps as well as the stock selection.”
Sharing his views on YnG strategy, Vikas Khemani, Founder, Carnelian Asset Management & Advisors said that they focus on bottom-up stock picking while selecting stocks. These are all high-quality companies with a good dividend yield and decent growth. The stocks they bought in the past one year turned out to be in our favour. Companies like HAL, HCL Technologies, Phillips Carbon, NTPC and CESC delivered robust returns to them in the last one year.
Investors need a minimum corpus of Rs 50 lakh for investment in PMS. Until 2019, this amount was restricted to Rs 25 lakh.
With a rally of 92.16%, Investsavvy Portfolio Management LLP’ Alpha Fund is next on the list. It was by Bonanza Portfolio’s Value (up 89.87%) and Equitree Capital Advisors’s Emerging Opportunities (up 89.63%).
Asked how Bonanza Portfolio pick stocks for their schemes, Achin Goel, Vice President, Bonanza Portfolio said, “We have our internal proprietary screeners and processes which assist us to identify strong stocks. From this bucket, we scout for emerging sectors and stocks which meet our strategy approach. This is followed by manual assessment and validation by our internal research team. We thoroughly assess the margin of safety before taking any position in a stock and continuously revalidate our thesis post-investment.” Goel is bullish on sectors such as healthcare, information technology, renewable energy, manufacturing, infrastructure and defence.