A majority of Dalal Street’s top money managers for high networth individuals managed to generate alpha in August amid subdued sentiment in domestic equities as high-frequency data signalled an acute slowdown in the economy and foreign institutional investors continued to offload stocks.
This is a welcome break from a frustrating losing spree that saw most PMSes bleed profusely through May, June and July.
PMSes cater to wealthy investors with portfolio sizes exceeding Rs 25 lakh, and charge higher fees compared with mutual funds for their services.
Data available on the Sebi website showed seven of the top 12 portfolio managers delivered between 0.90 per cent and 3 per cent returns for August.
The country’s biggest PMSes run by Motilal Oswal Asset Management Company and ASK Investment Managers delivered 1.12 per cent and 2.98 per cent returns in August even as BSE benchmark Sensex shed 0.40 per cent
With 42,601 investors, the Motilal Oswal PMS was managing Rs 13,980 crore as of August 31. ASK Investment Managers had an asset under management (AUM) of Rs 17,920 crore with 22,872 investors.
Motilal Oswal Financial Services in a report said the continued economic slowdown, as manifested in the recent GDP print, clearly pointed toward a challenging grind ahead for the long-awaited earnings recovery. Measures announced by the government to stem the slowdown have not really helped sentiment as yet, even though they augur well from a liquidity viewpoint.
India’s economic growth slumped for the fifth straight quarter to hit an over six-year low of 5 per cent in June quarter as consumer demand and private investment slowed amid deteriorating domestic and global cues.
Among other top PMSes, schemes managed by Alchemy Capital Management, Birla Sun Life Asset Management, Unifi Capital, NJ Advisory and Banyan Tree Advisors showed gains of 0.92 per cent, 1.14 per cent, 1.03 per cent, 0.89 per cent and 1.20 per cent, respectively.
Some others continued to bleed. The PMS run by Kotak Mahindra Asset Management Company eroded 1.79 per cent of investor wealth in August. Similar schemes run by ICICI Prudential AMC, Invesco Asset Management, Enam AMC and Old Bridge slipped between 0.60 per cent and 3.25 per cent.
The top 12 PMSes were filtered on the basis of a minimum client base of 500 and asset under management (AUM) of at least Rs 1,000 crore.
Among other notable portfolio management services, a PMS run by Kochi-based investor Porinju Veliyath-led Equity Intelligence witnessed a 2.69 per cent drop, while a scheme run by Kolkata-based Basant Maheshwari-led Basant Maheshwari Wealth Advisors gained 3.88 per cent.
Saurabh Mukherjea’s Marcellus Investment Managers delivered 5.83 per cent return, while a PMS run by Ambit Capital logged 6.38 per cent gain. Ambit was managing assets worth Rs 263 crore as of August 30, while Marcellus Investment Managers had an AUM of Rs 365 crore.
While the benchmark equity indices largely remained range-bound throughout August, the broader market continued to witness brisk selling.
Foreign institutional investors pulled out Rs 5,920 crore from the domestic capital markets (both equity and debt) in August and Rs 2,986 crore in July. They offloaded another Rs 1,263 crore worth of Indian stocks in the first week of September.
That, despite the government having rolled back a Budget proposal to slap a tax surcharge in the higher income group that directly hit some categories of FPIs.
“I do not think the entire FPI outflow seen in the past couple of months could come back, but at least half of it should return because of the recent signals that the FM sent out,” Saurabh Mukherjea of Marcellus said in a recent interview with ETNow.

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