Equity investors had quite a ride in FY18. The first nine months were a relentless rally, followed by a sharp fall in the last three months. Yet, the benchmark Sensex index managed a return of around 10%. For several active mutual fund managers, outperforming the indices in the financial year proved to be a hard ask. And it wasn’t easy for portfolio management services (PMS) either, despite their smaller and more focused portfolios. PMS schemes are seen to have an advantage over mutual funds as portfolios are individually managed.
What data tells us
Not all schemes fared well. One of the more popular PMS portfolios, Motilal Oswal IOP, a mid-cap portfolio with around Rs4,600 crore assets under management (AUM), gave 4.79% in FY18; BSE Sensex delivered 10.25%. Its 5-year annualised return at 23% compared to 12% from the Sensex, however, underlines its long-term track record. Old Bridge Capital Management’s All-Cap portfolio, a multi-cap scheme launched in August 2016, gave 38.7% in the same period. While both portfolios aren’t comparable, investors can choose either.