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PMS report card: Unconventional funds take top spots, star fund managers shine as well

Hem Securities’ India Rising SME Stars, which invests in SME and smallcap stocks, was the best performing fund, delivering 19.48 percent returns. Launched in February this year, the fund has returned about 25 percent

Two recently launched portfolio management services (PMS) strategies that focus on non-traditional companies bagged the top honours in August, performing rivals by a mile.

Hem Securities’ India Rising SME Stars, which invests in small and medium enterprises and smallcap stocks, was the best performing fund, delivering 19.48 percent returns. Launched in February 2022, the fund has returned about 25 percent, data compiled by PMS Bazaar shows.

Mohit Nigam, Head- PMS, Hem Securities, said stock selection and their allocation were key things that worked for his fund.

“We always have a pool of good quality stocks with exponential growth potential and solid fundamentals, these stocks are regularly tracked and monitored by our team. Then we try to select the best stocks from this pool to invest for our clients considering various parameters such as company-specific developments, sector-specific developments, valuations, peer performances etc,” he said in a statement.

Hem Securities did not share the portfolio stocks.

As valuations were getting richer, he would monitor all parameters and would opt for partial or complete profit booking when needed, Nigam said.

Green Portfolio’s The Impact ESG Fund was the second best performing fund in August, delivering nearly 14 percent. Launched in March, the fund has delivered 55 percent since inception.

The fund’s performance has come at a time when environmental, social and governance (ESG) concerns are fading from investors' minds. Anuj Jain, Research Head, and Co-Founder, Green Portfolio, said his team selected companies that were good on ESG parameters and at the same time, could deliver substantial returns for investors.

“For a small player in the fund management industry like us, the universe is much bigger. We see a lot of good companies doing tremendously good in their field, yet not getting due recognition. We try to find them early before the entry of bigger players. I think this was the main reason for the performance. Partly, the returns were contributed by good market sentiments as well,” he said.

Jain said concerns around ESG could also be practices adopted by ESG rating agencies. One example is the inclusion of the world’s biggest cigarette producer Philip Morris to Dow Jones Sustainability Index.

“We feel there’s a gap between what actual ESG should be and what it has been made, just for the sake of it. In The ‘Impact ESG’ Fund, we have selected companies where there is actual ground-level positive impact on the ESG side due to the company's operations. We will select companies manually and not mechanically. The idea is that it should perform well on ESG benchmarks with minimal compromise on good returns in the long run to the investor.”

Among other top performers in August were Invasset LLP’s Growth Pro Max, Green Portfolio’s MNC Advantage and Capgrow’s Special Situation, which delivered 10-12 percent returns.

Stars shine as well

Star fund managers also delivered decent returns, outperforming the market.

Saurabh Mukherjea-led Marcellus’ Rising Giants returned 6 percent, ASK’s Growth Portfolio, Financial Opportunities, Indian Entrepreneurship and Marcellus’ Little Champs delivered 5-6 percent.

In comparison, the Nifty delivered 3.5 percent, the Nifty midcap 100 6.23 percent and the Nifty smallcap rose 4.91 percent.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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