Portfolio Management Services in India - Myths, Benefits & Golden Thumb Rules with Sunil Rohokale
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Economic Times
a day ago
- Economic Times
From Paytm to Eternal: 42 stocks where India's top performing PMS fund managers are betting on
India's top-performing PMS funds placed bold bets in July across 42 stocks, spanning fintech giants, healthcare disruptors, agrochemicals, and industrial leaders. With strategies focused on digital disruption, speciality chemicals, and consumption growth, money managers are positioning portfolios for India's next phase of growth. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Valcreate's Digital Disruption Strategy: Betting Big on Fintech Giants Valcreate's Lifesciences Portfolio: Riding the Agrochemicals Wave Green Portfolio's MNC Advantage: Industrial Excellence Focus Emkay's Pearls Strategy: Diversified Mid-Cap Play Tired of too many ads? Remove Ads Ambit's Micro Marvels: Small-Cap Specialisation Wryght Research Factor Fund: Contrarian Fintech Bet Valcreate's Growing India: Chemical Sector Concentration Shade Capital Value Fund: Value Hunting Across Caps Brightseeds Xylem Maverick: Cash-Heavy Cautious Approach India's sharpest money managers are placing bold bets on the market's most exciting new-age darlings and forgotten gems. The country's top 10 performing Portfolio Management Services (PMS) scheme in July made concentrated plays on everything from fintech unicorns to healthcare disruptors and speciality chemicals, shows data from PMS Bazaar. Here's where the smart money is Asset Management - Healthcare Portfolio: Leading the Pack with 11.96% ReturnsThe month's standout performer, InCred's Healthcare Portfolio, is doubling down on India's medical revolution with a 19.81% allocation to Healthcare Global Enterprises, the country's largest cancer care network. The fund's conviction play extends to diagnostics powerhouse Thyrocare Technologies (17.35%) and emerging player Krsnaa Diagnostics (11.62%).The healthcare-focused strategy also holds Jubilant Pharmova (10.04%) and RPG Life Sciences (6.81%), positioning itself to capitalise on India's growing healthcare infrastructure and rising medical Investment Managers' IME Digital Disruption fund (up 6.34%) is making audacious bets on India's digital economy transformation. The fund has loaded up 22% in Eternal, followed by massive positions in fintech heavyweight One 97 Communications - Paytm (19.30%) and insurance aggregator PB Fintech (19.20%).The digital thesis extends to FSN E-Commerce Ventures - Nykaa (11.40%) and food delivery giant Swiggy (7.10%), capturing the entire new-age commerce ecosystem that's reshaping Indian consumer Valcreate strategy making waves is their Lifesciences and Specialty Opportunities fund (8.48% returns), which has positioned itself as the go-to agrochemicals play. Leading the charge is Sharda Cropchem , with a commanding 15.85% weight, backed by pharma giant Divi's Laboratories (9.33%).The fund's agrochemical conviction deepens with Sumitomo Chemical India (8.08%), Dhanuka Agritech (7.49%), and Rallis India (7.31%), betting on India's agricultural modernisation and crop protection Portfolio's MNC Advantage fund (6.89% returns) is zeroing in on India's industrial backbone through multinational subsidiaries. KSB leads the portfolio at 12.68%, followed by engineering specialist Integra Engineering India (10.21%) and auto components player Federal-Mogul Goetze (9.42%).The strategy includes John Cockerill India (6.16%) and premium engineering brand Bosch (5.56%), capitalising on India's manufacturing renaissance and infrastructure Investment Managers' Pearls fund (4.20% returns) mirrors the digital disruption theme with Eternal as its top holding (16.30%), while maintaining pharmaceutical exposure through Divi's Laboratories (9.70%). The fund balances growth with stability through Nesco (8.80%), Federal Bank (7.10%), and auto ancillary Sundram Fasteners (7.10%).Ambit Investment Advisors' Micro Marvels Portfolio (4.27% returns) is hunting for tomorrow's champions in India's small-cap universe. The fund spreads its bets across Rajratan Global Wire (7.00%), staffing services leader Teamlease Services (6.50%), and industrial plays Menon Bearings, Entero Healthcare Solutions, and Thejo Engineering (6.00% each).The Factor Fund from Wryght Research (2.69% returns) demonstrates conviction in fintech recovery with One 97 Communications as its largest holding (7.73%). The fund diversifies across Hitachi Energy India (5.68%), Maharashtra Scooters (5.38%), fertiliser player Paradeep Phosphates (5.19%), and financial conglomerate Bajaj Holdings & Investment (4.91%).The Growing India fund (2.84% returns) maintains Valcreate's chemical sector thesis with Divi's Laboratories leading at 7.65%, supported by Sharda Cropchem (7.48%) and Rallis India (6.54%). The fund also holds Swaraj Engines (6.32%) and Sumitomo Chemical India (5.82%).Shade Capital's Value Fund (2.87% returns) is pursuing deep value opportunities across industrial names like Kilburn Engineering (4.33%), TD Power Systems (4.15%), and wealth manager Nuvama Wealth Management (3.94%). The fund also holds infrastructure play Transrail Lighting (3.71%) and building materials company Interarch Building Products (3.36%).The most conservative among the top performers, Brightseeds' Xylem Maverick Strategy (2.55% returns) holds a massive 47.29% in Zerodha Nifty 1D Rate Liquid ETF & Cash, suggesting a defensive stance. When invested, the fund focuses on agrochemicals through Dharmaj Crop Guard (8.56%), Sudarshan Chemical Industries (7.00%), renewable energy via Borosil Renewables (6.37%), and steel tubes specialist Scoda Tubes (5.49%).The positioning of India's top PMS performers reveals a clear trend: smart money is flowing into digital disruption stories, speciality chemicals, healthcare infrastructure, and industrial champions. With 42 distinct stock ideas ranging from established pharma giants to fintech unicorns, these fund managers are positioning for India's next growth phase while maintaining selective exposure across market caps and sectors.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Mint
a day ago
- Mint
Portfolio management services ride on pension savings, not just the wealth of the rich
Pension savings of millions of Indians have turbocharged the assets of portfolio management services (PMS), often seen as the preserve of India's well-heeled. The reasons: A rule that binds the retirement fund manager to invest via PMS, and higher tax and compliance burdens that dampen high-net-worth individuals' enthusiasm. These schemes, where you must put up a minimum of ₹50 lakh, managed assets worth ₹35 trillion as of May 2025, data from the Securities and Exchange Board of India (Sebi) showed. Of this, 79%, or ₹28 trillion, came from the EPFO. Five years earlier, the number stood at 75%. Meanwhile, the share of PMS assets from other sources -- read HNIs -- shrank from 24% to 21%. The EPFO, which manages retirement funds of nearly 70 million Indians, invests a slice of its investable corpus in debt instruments. This is mandated to be done via a PMS, funneling a deluge of funds to the PMS industry. While the PMS clientele is often seen as wealthy, EPFO's money comes from regular employees, who set aside a share of their monthly earnings to fund retirement. 'The EPFO utilizes a sophisticated outsourced model where the day-to-day management of its extensive corpus including debt instruments is delegated to a select group of appointed external fund managers," said Kalyani Sharma, partner, Singhania & Co. Between 45% and 65% of the EPFO portfolio should be in government securities, and 35-45% in various debt instruments, Sharma said. EPFO's debt corpus is managed by SBI Funds and UTI Asset Management. Emails sent to both remained unanswered. An email sent to EPFO also remained unanswered. 'EPFO is also allowed to invest in equity markets through exchange-traded funds like BSE Sensex, NSE Nifty and ETFs constructed specifically for CPSE disinvestments to the tune of 5-15%. But the majority of the EPFO investments remain in debt-related investments," said Shikhar Kacker, partner at Khaitan & Co. PMS assets from non-EPFO sources, primarily HNIs, have grown 70% over the last five years (till May end), while those from EPFO doubled in the same period, Sebi data showed. A tax on churning stocks, increased compliance, and higher ticket size has slowed the growth of the non-EPFO part, primarily comprising HNIs, experts said. Meanwhile, other avenues where HNIs invest have seen better growth. Total commitments raised by Category-III alternate investment funds, another type of investment vehicle, is up 4.7 times since FY20, while mutual funds' assets rose 2.95 times to ₹65.7 trillion in the same period. Mutual fund vs PMS Many investors could prefer mutual funds over PMS given their tax efficiency, said Pramod Gubbi, co-founder at Marcellus Investment Managers. In PMS, every time the manager sells a stock and books a gain, the investor is liable to pay capital gains tax even if they haven't redeemed their investment. In contrast, mutual funds are tax-exempt at the fund level; so any short-term churn within the fund does not trigger a tax for the investor, who only pays capital gains tax upon redemption, which makes them more tax efficient, said Gubbi. The PMS industry, once known for its light-touch regulation, is now facing significantly higher compliance demands, experts say. Over the past year and a half, PMS providers have been required to submit as many as 12 reports a month to Sebi, covering quantitative information like client information, transaction details, expense and employee roles, besides routine monthly reports to Sebi and the Association of Portfolio Managers of India, said Bhavin Shah, CIO at Sameeksha Capital and board member of APMI. Shah said this burden could be eased if Sebi sourced the data directly from custodians or fund accountants, who already serve as the central repository for information related to PMS accounts. The added compliance requirements have raised costs, pushing the break-even AUM for PMS providers from about ₹50 crore earlier to ₹200 crore now. Considering a startup puts capital of ₹10 crore while starting a PMS, it could take up to five years for a new player to break even, Shah added. In 2019, the minimum ticket size for a PMS was increased from ₹25 lakhs to ₹50 lakhs, which could be another reason for the slower growth, experts say. 'Increased minimum ticket size could deter investors from putting money into a new PMS," said Sushant Bhansali, CEO of Ambit Asset Management. 'Adding incremental funds to an existing PMS is manageable, but committing another ₹50 lakh to start afresh with a new PMS becomes a challenge for many investors." Moreover, unlike AIFs, PMSes aren't allowed to invest in unlisted equities, which could be another the industry'Es slower growth, Bhansali added.
Time of India
2 days ago
- Time of India
Corporate bonds in 2–3 year segment offer ‘best bang for buck': Shriram Ramanathan
With interest rates stabilising and inflation unlikely to drive further monetary easing, investors may want to shift focus to shorter-maturity corporate bonds . Shriram Ramanathan, CIO–Fixed Income at HSBC Mutual Fund, believes the two- to three-year corporate bond segment currently offers the 'best bang for your buck,' combining attractive yields with lower duration risk. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Undo In a recent conversation, he explained why widening spreads and stable rate conditions make this segment a sweet spot for fixed income portfolios. Edited Excerpts – Kshitij Anand: And yes, with inflation coming in at 2.1%, do you see there is room for further rate cuts as well? And yes, we are in a wait-and-watch mode. The RBI has already front-loaded, we would say, for the year 100 basis points. But yes, could there be another rate cut in the offing? Shriram Ramanathan: See, as far as a rate cut is concerned, where we are today, the RBI governor has been fairly clear and, in some ways, you could argue maybe a bit too clear, because it takes away the hope, excitement, and expectations angle of it. That is where the communications part comes into play. But he has been fairly transparent in saying, 'Hey, monetary policy has done its bit. It takes time. Now, we have to wait for it to seep through the economy.' Bonds Corner Powered By Corporate bonds in 2–3 year segment offer 'best bang for buck': Shriram Ramanathan Investors might consider shifting to shorter-maturity corporate bonds. Shriram Ramanathan from HSBC Mutual Fund suggests focusing on two- to three-year bonds. These bonds offer attractive yields with lower risk. Rate cuts depend on growth and US Federal Reserve actions. Short-duration funds and medium-duration funds are good options. Income-plus-arbitrage funds offer tax efficiency. Set your portfolio free: Using bonds to escape the shackles of market volatility GMR Airports' Rs 1,500-crore bond issue to MFs comes up short MTNL defaults on bond repayment due on August 24 India's long bond rally falters as fiscal risks mount, demand ebbs Browse all Bonds News with Kshitij Anand: The transmission has to happen, yes. Shriram Ramanathan: Exactly. And now, for a further rate cut, it really comes down to three things broadly. The first one is obviously CPI. Like you pointed out, CPI has already been fairly below the RBI's earlier projections. There was a huge markdown that they had to do in this particular policy, and the upcoming number is also going to be fairly lower, as per our expectations. So CPI, to a large extent, has already been pre-empted by the RBI through the markdowns they have done in the forecast. I do not think CPI will be the reason for them to go more aggressive with, let us say, further rate cuts. The second factor is growth. And like I alluded to earlier, as and when any growth-negative impacts start becoming clearer—let us say the tariffs become crystallised and there is indeed an impact on the export side or even on our domestic economy—if there is a slowdown and if indeed the 6.5% growth estimate of the RBI turns out to be overoptimistic and needs to be marked down to, let us say, 6.1% or 6.2%, that is one reason why the RBI will start looking at whether more action is required. Live Events Third, and importantly, is the US Fed's action. That is the other thing that has been changing over the last one month. Clearly, markets are now pricing in a September rate cut, more than two rate cuts by the end of this calendar year, and another three to follow next year. That is now driving a lot of other emerging market bond markets as well, because as and when the Fed starts moving, it opens up space for a lot of other EM central banks. The interest rate differentials start widening again, which gives more space and opportunity for EM central banks to act. So, out of the three factors, inflation is unlikely to be the reason for us to embark on any further rate cuts, but growth and US action are two things we are keeping an eye on. We do think that once the Fed starts cutting in September, somewhere in Q4 of this calendar year, the RBI will probably have a little bit more space to maybe cut once—or at most twice—though once is more likely. But yes, that would be almost the end of its arsenal as far as rate cuts are concerned. I do think that space might open up, but that really requires the growth downside to crystallise. Kshitij Anand: Now, we have discussed rate cuts and how central banks are moving, both in India and the US. So just from an investor's perspective, do you think corporate bond funds, especially with up to five years' duration, look attractive now? What are your views on that as well? Shriram Ramanathan: No, I think that is a good question, because so far what has really happened over the last one year is that, broadly, interest rates have been moving lower. Duration funds have obviously had their time in the sun and were delivering good returns. But over the last two months, we have seen— which is typical of any rate-cutting cycle— that towards the bottom of a rate-cutting cycle, rates tend to pre-empt the last few cuts. The longer-end yields make their bottom probably before the last rate cut itself, and that is what we have seen this time around as well. We saw the 10-year bottom out at 6.17% in May, prior to the 50 basis points cut in June. Since then, we have been heading slightly higher. So, the duration play is a lot more tactical now. There is no secular, structural move lower in longer-end rates anymore, which is why corporate bonds start looking more attractive. Once you start drilling down into corporate bonds themselves, I would say the underlying space to look at is probably two- to three-year corporate bonds, because that is where you actually get the best bang for your buck. Yields there are now close to 6.70%—as of now 6.70% to 6.75% for a two-year corporate bond—which is the same as a 12- to 13-year government bond. So, you do not take too much maturity or duration risk, but you still end up getting a fairly attractive yield. Spreads there are close to 80 basis points, the widest we have seen in quite some time—over the last four to five years. These used to be as low as 25-30 basis points about a year to a year and a half back. That is the second reason why corporate bonds in that space are attractive. Now, to your question of which fund category makes the most sense, I would say it is probably the short-duration category, which is actually best targeted towards slightly lower maturity, with less exposure to government bonds and more to the two- to three-year corporate bonds—rather than the corporate bond fund category you refer to. In general, if you look at the industry, I think short-duration funds are better positioned in this segment going forward. Otherwise, you can pick and choose a few corporate bond funds. For example, the HSBC Corporate Bond Fund is specifically positioned in the two- to three-year corporate bond space and has kept the duration fairly low. That is another space I would say is good to look at. So, to your question, it is good to look at short-duration funds or pick and choose a few corporate bond funds with lower maturity and duration and wider spreads—not so much in the five-year duration space you refer to—because that becomes a bit too long, and there is going to be a lot of supply over the coming few quarters in that segment, which will keep those yields high, or maybe push them higher still. The two- to three-year corporate bond space is extremely good, keeps the risk low, and gives you a fantastic carry. Kshitij Anand: But if someone is looking at everything happening on the global and domestic fronts, what is your recommended approach for investors, let's say, who have a 12- to 18-month kind of time horizon? Shriram Ramanathan: From a fixed income perspective, like I said, we are still, in a way, lucky that compared to the way bank fixed deposit rates are coming down very sharply, we still have fairly attractive yields as far as two- to three-year corporate bonds and short-duration funds are concerned— in the 6.75% to 7% zone—which is not a bad space to be in. The second thing I would say is that now that we are in a stable regime, it is good to look at funds with a little bit of a yield-pickup play, wherein, in a measured way, you take exposures to AA+, AA, and AA– papers—maybe 25-30%. Typically, a medium-duration fund would be a category like that, where you start playing the 'instead of 6.75%, can I get 7.25% or 7.5% yield on the portfolio' approach while keeping the risk relatively measured. I think the third thing—and this is a space that has really opened up, but requires a slightly longer investment horizon—is the income-plus-arbitrage fund of funds. That is a very tax-efficient instrument or vehicle available. For a two-year period, you get 12.5% taxation. The underlying is a mix of arbitrage and debt funds, and the good part is that you can actively move across debt funds from one to another, with the fund manager making that choice, and as an investor, you are not impacted on the tax side. So, I would say three products: One, short-duration funds for sure; two, yield-pickup medium-duration funds; and three, income-plus-arbitrage fund of funds. These are the three ways to play the next 18 to 24 months from a fixed income perspective.
