Markets End on a Weak Note in December, but 211 PMS Strategies Outperformed the Nifty
Markets End on a Weak Note in December, but 211 PMS Strategies Outperformed the Nifty
After a strong rally in November, Indian equity markets witnessed a challenging December 2022. Large-cap, mid-cap, and small-cap indices all closed the month in negative territory.
However, unlike previous months, the BSE Small Cap and Nifty Midcap 100 indices declined less than the Nifty 50, indicating relatively better resilience in broader markets.
Despite the weak market sentiment, Portfolio Management Services (PMS) strategies delivered a comparatively stable performance, with a majority outperforming the benchmark indices.
Key Market Highlights of December 2022
Several macroeconomic factors influenced market performance during the month.
Interest Rate Hikes Continue
Although inflation showed signs of easing, central banks globally — including the Reserve Bank of India (RBI) — continued raising interest rates.
The hawkish stance adopted by the US Federal Reserve and global central banks negatively impacted investor sentiment.
Heavy FII Selling Pressure
Foreign Institutional Investors (FIIs) remained net sellers during December 2022.
- Net FII selling stood at approximately ₹14,231 crore.
- Selling pressure weighed heavily on Indian equities.
PMS Strategies Show Relative Strength
Despite market weakness:
- 211 out of 309 PMS strategies outperformed the Nifty 50.
- Nearly 7 out of 10 PMS strategies performed better than the benchmark.
Debt-oriented PMS strategies also provided relative stability during volatile market conditions.
Top 10 PMS Strategies of December 2022
Among the 309 PMS strategies tracked and analyzed by PMS Bazaar, the following strategies emerged as top performers.
Key Observations
- Small-cap PMS strategies dominated the leaderboard.
- Debt PMS strategies also featured prominently among top performers.
Best Performing PMS Strategies
1. India Rising SME Stars – HEM Securities
- Monthly Return: 6.38%
- Focus: Small and medium-sized enterprises (SMEs)
2. Super 30 Strategy – Green Portfolio
- Monthly Return: 3.84%
- Strategy Focus:
- Turnaround opportunities
- Stocks with re-rating potential
3. Aries Mid Yield Strategy – Scient Capital
- Monthly Return: 2.27%
- Strategy Type: Debt PMS
- Investment Focus:
- AA to BB-rated debt securities
Performance Comparison with Nifty
The chart below compares the returns of the top 10 PMS strategies against the Nifty 50 benchmark.
Category-Wise PMS Performance Analysis
The performance across PMS categories varied significantly during December 2022.
Key Insights
- Large-cap PMS strategies underperformed the most.
- Thematic strategies showed the least downside.
- Mid-cap and small-cap categories performed relatively better than large-cap strategies.
Small-Cap PMS Strategies
The small-cap category witnessed relatively strong performance during the month.
Category Overview
- Total Strategies Tracked: 18
- Strategies Outperforming BSE Small Cap: 7
Top Performers
India Rising SME Stars – HEM Securities
- Return: 6.38%
Growth Strategy – Molecule Ventures LLP
- Return: 1.52%
India Opportunities Product – Aequitas Investment Consultancy
- Return: 1.41%
- Investment Style:
- Value investing
- Contrarian investing
- Growth investing
Small & Midcap PMS Strategies
The Small & Midcap category faced pressure during the month.
Category Performance
- Average Return: -2.46%
- Only one strategy delivered positive returns.
Leading Strategies
Mid & Small Cap Equity Strategy – Silverarch
- Return: 0.28%
Caterpillar Strategy – Invesco
- Return: -0.19%
Emerging Leader Fund Strategy – Varanium Capital Advisors
- Return: -0.31%
Midcap PMS Strategies
Midcap-focused PMS strategies had a weak month overall.
Category Overview
- Total Strategies: 21
- Strategies Beating Nifty Midcap 100: 3
- Average Category Return: -2.9%
Top Midcap Strategies
Pearls Strategy – Emkay Investment Managers
- Return: -0.54%
India Resurgent Portfolio Series III – JM Financial Services
- Return: -0.86%
Clean Tech Portfolio Strategy – NAFA Asset Managers
- Return: -1.27%
Large & Midcap PMS Strategies
The large & midcap category continued to face pressure.
Category Performance
- Average Return: -2.88%
Top Performers
Alpha Fund Strategy – Green Lantern Capital
- Return: -0.95%
Multifactor Equity – Motilal Oswal
- Return: -2.1%
All Weather Portfolio – Oro Asset Management
- Return: -2.3%
Large-Cap PMS Strategies
Large-cap PMS strategies struggled due to weakness in benchmark indices.
Category Highlights
- Average Return: -3.22%
- Strategies Outperforming Nifty: 14 out of 25
Best Performing Strategies
Exposure Equity Index Strategy – Agreya Capital Advisors
- Return: 0.61%
ICICI Prudential AMC Large Cap Strategy
- Return: -0.38%
ACE 15 Strategy – Asit C Mehta Investment Intermediates
- Return: -2.4%
Multi-Cap PMS Strategies
Multi-cap strategies delivered relatively stable performance.
Category Overview
- Total Strategies: 151
- Strategies Beating BSE 500: 84
- Average Return: -2.89%
Top Multi-cap Strategies
Value Strategy – ICICI Prudential AMC
- Return: 2.03%
Edge Strategy – Bonanza
- Return: 0.44%
Fundamental Value Fund Strategy – Itus Capital Advisors
- Return: 0.13%
Thematic PMS Strategies
Thematic PMS strategies emerged as the best-performing category during December 2022.
Category Performance
- Average Return: -1.58%
Top Thematic Strategies
Super 30 Strategy – Green Portfolio
- Return: 3.8%
Focused Corp Lenders Strategy – Trivantage Capital Management
- Return: 0.2%
Rise Strategy – Invesco
- Return: -0.7%
Outlook for Indian Markets in 2023
Inflation showed signs of moderation toward the end of 2022, both in India and globally.
Additional factors likely to influence markets include:
- RBI policy decisions
- Union Budget announcements
- Corporate earnings growth
- Global interest rate trends
- FII participation
As markets move into 2023, investors remain optimistic about long-term growth opportunities despite near-term volatility.
Conclusion
December 2022 was a challenging month for Indian equity markets, with benchmark indices ending in negative territory due to rising interest rates and global uncertainties.
However, PMS strategies demonstrated resilience:
- 211 PMS strategies outperformed the Nifty.
- Small-cap and thematic strategies showed relative strength.
- Debt-oriented PMS strategies offered stability during volatility.
For investors and wealth managers, PMS strategies continue to provide differentiated investment opportunities through active portfolio management and specialized investment approaches.
Understanding category-wise trends and strategy performance can help investors make better-informed investment decisions in evolving market conditions.
