Falling Inflation and Crude Prices Lift Nifty, but Few PMS Strategies Outperform
Falling Inflation and Crude Prices Lift Nifty, but Few PMS Strategies Outperform
Indian equity markets extended their post-Diwali rally in November 2022 as falling crude oil prices and easing inflation boosted investor sentiment. Benchmark indices moved sharply higher, with the Nifty delivering a strong monthly gain of 4.14%.
The rally, however, was largely concentrated in large-cap stocks, while mid-cap and small-cap indices underperformed. Although broader market indices such as the BSE 500 posted positive returns, many PMS strategies struggled to outperform benchmark indices during the month.
This blog explores the market drivers behind the November 2022 rally and provides a category-wise analysis of PMS strategy performance.
Key Market Highlights – November 2022
Several macroeconomic and global factors supported Indian markets during November 2022:
- Falling crude oil prices
- Cooling inflation in the US and Europe
- Positive global market sentiment
- Strong FII inflows into Indian equities
- Expectations of slower RBI rate hikes
Foreign Institutional Investors (FIIs) net bought nearly ₹22,546 crore worth of equities during the month. Since FIIs typically invest heavily in blue-chip stocks, large-cap indices like Nifty outperformed broader markets.
Market Performance Snapshot
| Index | November 2022 Return |
|---|---|
| Nifty 50 | 4.14% |
| BSE 500 | 3.32% |
Despite the bullish market environment:
- Only 36 out of 308 PMS strategies outperformed the Nifty
- 255 PMS strategies still delivered positive monthly returns
Top 10 PMS Strategies of November 2022
From the 308 PMS strategies tracked and analyzed by PMS Bazaar, the following emerged as the top performers.
Best Performing PMS Strategies
1. ACE Multicap Strategy – Asit C Mehta Investment
- Monthly Return: 13.54%
- Focuses on highly undervalued, high-quality stocks
2. Wealth Builder Strategy – Fractal Capital Investments
- Monthly Return: 9.06%
- Concentrated intrinsic value investing strategy
3. Dividend Yield Strategy – Green Portfolio
- Monthly Return: 9.00%
- Focuses on high dividend-yielding stocks for income and appreciation
Multi-cap strategies dominated the top-performing PMS list during November 2022.
PMS Returns vs Nifty Benchmark
The chart below compares the returns of the top PMS strategies against the Nifty benchmark during November 2022.
Category-Wise PMS Performance Analysis
Different PMS categories delivered mixed performance based on market capitalization focus and investment styles.
Small-Cap PMS Strategies
Among the 18 small-cap PMS strategies analyzed:
- 6 strategies outperformed the benchmark
- Average category return: 2.21%
- BSE Small-Cap Index return: 2.44%
Top Small-Cap PMS Strategies
Minerva India Under-served Strategy – Right Horizons
- Return: 6.46%
India Opportunities Product – Aequitas Investment Consultancy
- Return: 5.75%
Diversified Long Term Value Strategy – Counter Cyclical Investments
- Return: 5.63%
Small & Midcap PMS Strategies
The small & midcap PMS category delivered average returns of 1.29% during November 2022.
Top Performers
Growth Fund – Green Lantern Capital
- Return: 5.28%
Abakkus Emerging Opportunities Approach
- Return: 5.10%
Rising Star Opportunity – Valentis Advisors
- Return: 4.73%
Midcap PMS Strategies
Midcap PMS strategies delivered relatively muted returns during the month.
Midcap PMS Highlights
- Average category return: 0.88%
- Only 5 of 21 strategies outperformed Nifty Midcap 100
Top Midcap PMS Strategies
ACE Midcap – Asit C Mehta Investment Intermediates
- Return: 7.25%
India Resurgent Portfolio Series III – JM Financial Services
- Return: 3.31%
Vallum India Discovery – Master Portfolio Services
- Return: 3.13%
Large & Midcap PMS Strategies
The large & midcap category delivered average monthly returns of 2.04%.
Top Large & Midcap PMS Strategies
Large & Midcap Strategy – Care Portfolio Managers
- Return: 3.60%
Alpha Fund – Green Lantern Capital
- Return: 3.33%
Value Equity+ – LIC MF
- Return: 2.90%
Large-Cap PMS Strategies
Although the Nifty rallied sharply during November, most large-cap PMS strategies failed to outperform the benchmark.
Large-Cap PMS Highlights
- Only 2 of 25 strategies beat the Nifty
- Average category return: 2.13%
- Nifty return: 4.14%
Top Large-Cap PMS Strategies
Tulsian PMS
- Return: 5.63%
Large Cap Strategy – Acepro Advisors
- Return: 4.86%
Large Cap Strategy – ICICI Prudential PMS
Multi-Cap PMS Strategies
Multi-cap PMS strategies featured prominently among the best performers during the month.
Multi-Cap PMS Highlights
- Total strategies analyzed: 152
- Strategies outperforming BSE 500: 27
- Average category return: 1.79%
- BSE 500 return: 3.32%
Top Multi-Cap PMS Strategies
Wealth Builder Strategy – Fractal Capital Investments
- Return: 9.06%
Value Strategy – ICICI Prudential PMS
- Return: 6.72%
YNG Strategy – Carnelian Asset Advisors
- Return: 6.30%
Thematic PMS Strategies
Thematic PMS strategies delivered relatively stronger returns during November 2022.
Average Category Return
- 2.84%
Top Thematic PMS Strategies
Dividend Yield Strategy – Green Portfolio
- Return: 9.00%
Dawn Strategy – Invesco
- Return: 4.36%
Index Fund – Green Portfolio
Market Outlook for 2023
As inflation trends began easing globally and expectations grew around slower rate hikes by central banks, investor sentiment improved toward the end of 2022.
Key factors expected to influence markets going forward include:
- RBI monetary policy decisions
- Inflation trajectory
- Corporate earnings growth
- FII investment flows
- Global economic conditions
With India entering a relatively COVID-free environment and economic activity improving, market participants anticipated stronger earnings momentum and broader market participation heading into 2023.
Key Takeaways
- Falling inflation and crude oil prices boosted Indian equities in November 2022.
- Large-cap stocks led the market rally while broader markets lagged.
- Most PMS strategies underperformed benchmark indices despite positive returns.
- Multi-cap and thematic PMS strategies emerged as strong performers.
- Investors should focus on long-term portfolio quality, diversification, and consistency rather than short-term market trends alone.
For investors evaluating PMS strategies, understanding investment philosophy, benchmark comparison, risk management, and market positioning remains critical for long-term wealth creation.
