91 of 133 PMS strategies beat benchmarks in one year, shows data

A higher percentage of portfolio management Services  (PMS) have beaten their underlying benchmarks than mutual funds over one-, two-, three-, five- and 10-year periods, a study conducted by data aggregator and online portal PMS Bazaar shows. 

The study considers point-to-point returns for different periods and total return index for both categories. For PMS, post-fees returns are considered for 133 strategies for one year, 81 strategies for three years, 49 strategies for five years, and 25 strategies for 10-year period. For MFs, 401, 294, 253, and 201 schemes are considered for the respective periods based on the data by Association of Mutual Funds in India. 

91 or 68.4 per cent of the 133 PMS strategies beat their underlying benchmarks in the past one year. In comparison, 53 per cent of the 401 mutual funds taken into consideration beat their respective benchmarks. This was in a period when most benchmark indices slid in double digits owing to the Covid-19 pandemic. A little over a third (35 per cent) of the PMS strategies outperformed in the three-year period, while about a fourth (25.5 per cent) did so for the MF schemes. 

 

 

"The stock movement during the last three years has been highly concentrated, and it was pretty common to miss them if managers followed a close-to-index strategy," the online portal observed in its note. 

41 per cent of the 41 PMS strategies beat their benchmarks vis-a-vis 29 per cent of the 253 MF schemes in a 5-year period. The outperformance of PMS strategies is best in a 10-year period, with 84 per cent of the 25 strategies beating their benchmarks compared with 46 per cent of the 201 MF schemes.