Indices Continue to Sulk Even as 205 PMS Strategies Outperform the Nifty
Indices Continue to Sulk Even as 205 PMS Strategies Outperform the Nifty
Indian equity markets witnessed another challenging month in February 2023 despite optimism following the Union Budget. Investor sentiment weakened due to the Adani-Hindenburg controversy, RBI’s unexpected interest rate hike, and continued foreign institutional investor (FII) selling.
Even amid market weakness, Portfolio Management Services (PMS) strategies demonstrated resilience, with a majority outperforming benchmark indices during the month.
Market Overview – February 2023
All major Indian equity benchmarks ended February in the red.
Key Factors Impacting Markets
- Adani-Hindenburg controversy weighed heavily on investor sentiment.
- RBI raised interest rates by 25 basis points unexpectedly.
- FIIs sold equities worth nearly Rs 11,090 crore in the cash market.
- Global concerns increased following the Silicon Valley Bank crisis.
- Midcap and small-cap segments witnessed notable pressure.
Benchmark Performance
| Index Category | February 2023 Performance |
|---|---|
| Nifty 50 | -2.03% |
| Midcap Indices | Negative |
| Small-cap Indices | Negative |
| Broader Market Indices | -1.82% to -3.07% |
Despite the market correction, PMS strategies displayed relatively stronger performance.
- 205 out of 305 PMS strategies outperformed the Nifty.
- PMS category average return stood at -1.44%.
- Multicap strategies emerged as one of the strongest performers.
Top 10 PMS Strategies of February 2023
Among the 305 PMS strategies tracked by PMS Bazaar, multicap strategies dominated the leaderboard.
Leading PMS Strategies
1. Vallum India Discovery – Vallum Capital
- Return: 3.38%
- Strategy: Growth at reasonable price (GARP)
2. Strategic Fund – Unique Asset Management
- Return: 3.38%
- Focus: Diversified investment opportunities
3. Mega Trends Strategy – Marathon Trends
- Return: 3.35%
- Focus: Long-term thematic and trend investing
The top PMS strategies significantly outperformed broader benchmark indices during a difficult market environment.
Category-Wise PMS Performance
Different PMS categories delivered mixed results during February 2023.
Key Takeaways
- Midcap PMS strategies were relatively the strongest performers.
- Multicap strategies outperformed broader benchmarks.
- Thematic strategies underperformed the most.
- Most categories delivered negative returns due to market volatility.
Small-Cap PMS Strategies
The small-cap PMS category performed moderately well despite broader market weakness.
Small-Cap PMS Performance Highlights
- 12 out of 18 strategies beat the BSE Small Cap index.
- Benchmark Return: -3.07%
Top Small-Cap PMS Strategies
India Opportunities Product – Aequitas Investment Consultancy
- Return: 2.18%
- Strategy: Blend of value, contrarian, and growth investing
Emerging Giants – Ambit Investment Advisors
- Return: 2.03%
- Focus: Early-stage market leaders
O3 Special Situations Portfolio – o3 Securities
- Return: 0.97%
- Focus: Turnaround and high-growth opportunities
Small & Midcap PMS Strategies
The Small & Midcap PMS category delivered an average return of -1.50% during February 2023.
Best Performing Strategies
Vallum India Discovery – Vallum Capital Advisors
- Return: 3.38%
Ten X Strategy – Ambit Investment Advisors
- Return: 1.57%
Future Stars – Magadh Capital Advisors
- Return: 1.18%
Midcap PMS Strategies
Midcap PMS strategies performed comparatively better than most other categories.
Midcap PMS Highlights
- 14 out of 21 strategies outperformed the Nifty Midcap 100.
- Category Average Return: -0.93%
Top Midcap PMS Strategies
Clean Tech Portfolio – Nafa Asset Managers
- Return: 2.24%
Gems Strategy – Emkay Investment Managers
- Return: 1.60%
Emerging India – Nippon India
- Return: 1.60%
Large & Midcap PMS Strategies
Large & Midcap PMS strategies delivered an average return of -1.47%.
Top Strategies
Equity Factor Quant – True Beacon Investment
- Return: 0.10%
Alpha Fund – Green Lantern Capital
- Return: -0.11%
Multifactor Equity – Motilal Oswal
- Return: -0.13%
Most strategies in this category ended the month with negative returns.
Large-Cap PMS Strategies
Large-cap PMS strategies outperformed expectations despite benchmark weakness.
Key Insights
- 19 of 26 strategies outperformed the Nifty.
- Category Average Return: -1.58%
Top Large-Cap PMS Strategies
Factor Advantage Strategy – LIC MF
- Return: 0.96%
Alpha 10 Strategy – Accuracap
- Return: 0.43%
Top 200 Core Equity Portfolio – Aditya Birla Sun Life AMC PMS
- Return: 0.40%
Multicap PMS Strategies
Multicap strategies emerged as one of the strongest categories during February 2023.
Performance Snapshot
- 117 of 149 multicap strategies beat the BSE 500 benchmark.
- Category Average Return: -1.46%
Top Multicap PMS Strategies
Mega Trends Strategy – Marathon Trends
- Return: 3.35%
Core Fund Strategy – Stallion Asset
- Return: 3.26%
GARP Fund – Composite Investments
- Return: 2.43%
Thematic PMS Strategies
The thematic category underperformed compared to most other PMS categories.
Category Highlights
- Average Return: -2.21%
- Only one thematic strategy delivered positive returns.
Top Thematic PMS Strategies
MNC PMS Strategy – Anand Rathi Advisors
- Return: 0.54%
India Next Portfolio – Renaissance
- Return: -0.59%
Kings of Capital – Marcellus
- Return: -0.94%
Key Insights for PMS Investors
February 2023 highlighted the importance of diversification and active portfolio management during uncertain market phases.
Major Learnings
- Multicap and midcap PMS strategies demonstrated resilience.
- Broader markets remained under pressure due to macroeconomic uncertainty.
- Investors continued to prefer diversified strategies during volatile conditions.
- Global banking concerns and rising interest rates influenced sentiment significantly.
Outlook for Indian Markets
Markets remain sensitive to both domestic and global developments.
Factors to Watch Ahead
- RBI’s future interest rate decisions
- US Federal Reserve policy stance
- FII investment flows
- Global banking sector stability
- Corporate earnings recovery
Although near-term volatility may persist, long-term investors continue to explore PMS strategies for active portfolio management and benchmark outperformance.
Conclusion
February 2023 was a difficult month for Indian equity markets, but PMS strategies showcased relative strength. While benchmark indices corrected sharply, a large number of PMS strategies outperformed the Nifty, especially within the multicap and midcap categories.
As market uncertainty continues, investors are increasingly relying on professionally managed PMS portfolios that combine diversification, active risk management, and long-term investment discipline.
Platforms like Finalyca help investors and wealth managers compare PMS strategies, analyze performance trends, and make data-driven investment decisions with greater confidence.
