{"id":113792,"date":"2021-02-22T11:48:58","date_gmt":"2021-02-22T11:48:58","guid":{"rendered":"https:\/\/precoinnews.com\/?p=113792"},"modified":"2021-02-22T11:48:58","modified_gmt":"2021-02-22T11:48:58","slug":"why-large-cap-pms-schemes-failed-to-beat-benchmark-index","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/why-large-cap-pms-schemes-failed-to-beat-benchmark-index\/","title":{"rendered":"Why large-cap PMS schemes failed to beat benchmark index"},"content":{"rendered":"

Only around 44% of PMS schemes did better, among the schemes investing in large-cap companies.<\/strong><\/p>\n

<\/strong><\/p>\n

Companies providing portfolio management services (PMS) had a tough time beating the benchmark index in January, with more than half of the schemes invested in large companies underperforming in the run-up to the Union Budget.<\/p>\n

The Nifty 50 index was down 2.5 per cent during the month.<\/p>\n

Only around 44 per cent of PMS schemes did better, among the schemes investing in large-cap companies.<\/p>\n

The analysis is based on data from industry tracker PMS Bazaar.<\/p>\n

Half the mid-cap schemes outperformed, while the rest underperformed.<\/p>\n

The ratio improved for multi-cap schemes where around 62.2 per cent of the schemes gave higher returns than the corresponding benchmark.<\/p>\n

Small-cap schemes were the major outperformers.<\/p>\n

Around 10 schemes did better than the index out of the dozen schemes for which data was available.<\/p>\n

A total of 159 schemes was considered for the analysis across categories.<\/p>\n

Returns were calculated on a time-weighted rate of return basis for the schemes under consideration.<\/p>\n

The time-weighted rate of return eliminates the effects of inflows and withdrawals from the schemes to get a clearer sense of the fund manager’s performance.<\/p>\n

The PMS segment invests money on behalf of well-off individuals.<\/p>\n

The minimum investment that regulations allow is Rs 50 lakhs. It was Rs 25 lakhs earlier.<\/p>\n

The Securities and Exchange Board of India (Sebi) had sought to increase the amount to amount as part of a larger tightening of PMS regulations.<\/p>\n

This also included increasing net worth requirements and compliance standards.<\/p>\n

There are currently 361 registered portfolio managers as per the latest Sebi data.<\/p>\n

“There were 1,55,796 total clients in PMS industry as at the end of October 2020, of which 1,45,404 clients belong to discretionary services category, 8,409 clients belong to non-discretionary services category and 1,983 clients belong to advisory services category of portfolio management services,”  said the January Sebi bulletin.<\/p>\n

It pegged the assets under management at Rs 19.2 trillion.<\/p>\n

Around Rs 14.6 trillion was provident fund capital that asset managers count under PMS assets.<\/p>\n

Daniel GM, founder-director at industry-tracker PMS Bazaar said that the correction of a few large companies ahead of the Budget contributed to the underperformance since they were held by multiple players.<\/p>\n

The PMS segment typically has higher volatility and should also do better when markets rise, he added.<\/p>\n

Suresh Sadagopan, founder of the Ladder7 Financial Advisories who advises clients investing in PMS schemes says that the case for large-cap schemes is becoming weaker as Indian markets become more like developed ones.<\/p>\n

Passive funds seeking to replicate index performance rather than beat it are more the norm in places like the United States of America (USA or the US).<\/p>\n

Investors there prefer such funds since most fund managers find it hard to beat the market.<\/p>\n

“I think we are moving the US way,” he said.<\/p>\n

Schemes investing in the mid-cap or small-cap space where companies are less well-known could be the ones to add more value, according to him.<\/p>\n

The multi-cap schemes under consideration had assets of Rs 55,438 crore.<\/p>\n

The assets across large-cap, mid-cap and small-cap companies was a total of over Rs 6,300 crore.<\/p>\n

This is based on disclosed assets. Many have not provided information on the assets that they manage.<\/p>\n

Photograph: PTI Photo<\/strong><\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Only around 44% of PMS schemes did<\/p>\n","protected":false},"author":3,"featured_media":113791,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"\nWhy large-cap PMS schemes failed to beat benchmark index - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/business\/why-large-cap-pms-schemes-failed-to-beat-benchmark-index\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why large-cap PMS schemes failed to beat benchmark index - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"Only around 44% of PMS schemes did\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/business\/why-large-cap-pms-schemes-failed-to-beat-benchmark-index\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-22T11:48:58+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/02\/cfntalkfoto07broker.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/business\/why-large-cap-pms-schemes-failed-to-beat-benchmark-index\/\",\"url\":\"https:\/\/precoinnews.com\/business\/why-large-cap-pms-schemes-failed-to-beat-benchmark-index\/\",\"name\":\"Why large-cap PMS schemes failed to beat benchmark index - 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