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PMS SELECTOR November

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How PMSs have an edge over other Equity products

Portfolio Management Services

We shortlist and share the Top PMSs based on our 4P Analysis

Our 4P Analysis

Presenting our bouquet of Top PMSs to choose from

Top PMSs

The PMS providers we are empaneled with

Our PMS Partners

Views from PMS Fund Managers

Valuations favor Mid Caps

PMSs offer a better substitute to Direct Equity Portfolio for HNIs

PMS v/s Direct Equity

Why and how Portfolio Management Schemes give you an edge?

PMS strategy is meant to invest in concentrated basket of 15-25well researched companies. Such focused approach generatessuperior long-term performance and is meant for sophisticatedand informed investors who really want money to work harder forthem and are focused on long term performance and, notbothered by short to medium term volatility.

Concentrated, and Focussed

PMS strategy gives access to direct shareholding in thebusinesses, making it a more direct method of investing. Whenone invest in companies, it opens the door to not only growswith the rise in corporate earnings and dividends, but also thegrowth of investors own intellectual capital. As here investorclearly gets to know what’s happening in the portfolio. In thelong term, growth in all three matters and adds up.

Own businesses, and not units

PMS strategy works on the concept of personal demat holding withcommon research, and not a pooled stock portfolio acrossinvestors. Pooled stock portfolio concept is prone impulsive andbehavioral flows which rise with rising markets and peak out athigher valuations and fall with falling markets and bottom out atattractive valuations. In PMS, one investor’s behavioral reactions tomarket movements doesn’t impact other investor’s portfolios.

You own your own portfolio

Since PMS works with a concentrated approach, there is nocompulsion to churn a stock that is performing irrespective of itsrising weight in the portfolio over years. What matters is theexpected earnings and growth potential in the businesses held.Unlike this, in mutual funds, beyond a point, at times fundmanager may be forced to let go of a performing stock to cut itsrising weight, given the regulations.

Buy and hold, with low churn

WHY PMS

The difference between successful and really successful people is that really successful people say no to almost everything

~ Warren Buffet

PMS Value Proposition

Low Portfolio

Churn

Focused Strategies

(15-25 Stocks)

Consistent Alpha on

Benchmark

Managed Risk +

Liquidity

Fee Customization

(Fixed or Variable)

High Engagement & Transparency

Consistent to its Investment

Style

Professionally Managed Services

Suitable for HNIs, Corporates and NRIs

⚫ PMSs come with a minimum ticket size of Rs 25 lakhs

⚫ Only Sophisticated Investors can invest in a PMS because of its restriction of ticket size

Long-Term Wealth Creation Products

⚫ PMSs being more concentrated with active management tends to generate more alpha

⚫ One should target to invest in a PMS with a time horizon of 5 years

PMSs v/s Direct Equity Investments

Active Portfolio Management

Robust Risk Management

Tailor made to your objectives

Superior Returns

Active portfolio management is the cornerstone of successful equity investment.

Active Portfolio Management

Investments decisions are based on strong research conducted and vetted by investment teams.

Robust Risk Management

The portfolio manager builds and manages portfolios keeping in mind the strategy selected and the timing of the investment

Tailor made to your objectives

Data suggests 90 per cent of direct equity portfolios have been beaten by PMS investments

Superior Returns

Better option for High Net

Worth Individuals

A managed portfolio will always be better than a Direct Equity Portfolio. PMS allow investors to customize portfolios, depending on risk appetite and returns expectations. PMS is the next step for those who already have dabbled in direct investments. A concentrated portfolio like PMS though add to more risks but increases the potential of higher returns as well.

PMSs offer a better substitute to Direct Equity Portfolio for HNIs

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Our 4P Analysis

We first perform following basic filters on 100+ PMS products

• Min 2 Year of performance • Min 100 Cr of AUM

• Existence of Strong Term • Not Taking Un-due Risk

This reduces the Universe to 35 names

PhilosophyWe meet with the team, understand

their credentials and the philosophy. We do a thorough interview with the fund

manager and/or key people in the team. We check whether the team has shown

adherence to its philosophy during good and bad times in the past.

PortfolioWe check the construct, level of

concentration, allocation to sectors, EPS and forward PE .

PerformanceWe analyze period wise performance and compare it objectively. We give much higher weightage to long term performance and also allocate ranks on the basis of consistency.

PriceWe are quite particular about understanding in detail the fee structure, expenses, and exit loads.

Our Top Choice Portfolios

PMSCOMPARISON

Multi Cap Oriented Large Cap Oriented Mid & Small Cap Oriented

IIFL Multi cap

ASKIndia Entrepreneur

Axis Brand Equity

Marcellus Consistent

Compounders

Motilal IOP

Ambit Good and Clean

Portfolio Type

Low Beta PMS

Portfolio Of Large & Growing Companies With Promotors Significant Skin

In The Game

Multi Cap Portfolio of Recognized Brands

Concentrated Portfolio Of Top 1% Of Companies

Small & Mid Cap Portfolio Of Next Multi-Bagger

Companies.

Concentrated Portfolio Of Mid-Cap Companies With A Good Record And Clean Accounting

Fund Manager Aniruddha Sarkar Sumit Jain Trideep Bhattacharya Rakshit Ranjan Manish Sonthalia Aishvarya Dadheech

Age of PMS 4 Years & 10 Months 9 Years & 9 Months 2 Years & 9 Months 11 Months 9 Years & 8 Months 4 Years & 7 Months

AUM (cr.) 1,200 10,262 1,141 553 2,994 140

No of Stocks 25 19 20-22 13 23 13-18

Large | Mid | Small Cap Allocation

58.37% | 26.40% | 11.51%

74.00% | 25.00% | 0.00%

56.20% | 25.00% | 11.30%

68.00% | 25.00% | 6.00%

8.00% | 31.60% |59.70%

20.00% | 40.00% | 35.00%

Return Since Inception

18.87% 18.70% 13.40% 28.90% 10.87% 12.40%

Fee Structure 2.50% p.a 2.50% p.a 2.50% p.a 2.00% p.a 2.50% p.a 2.50% p.a

Exit Loads3% for 1st Year2% for 2nd Year1% for 3rd Year

3% for 1st Year2% for 2nd Year1% for 3rd Year

3% for 1st Year2% for 2nd Year1% for 3rd Year

Nil 2% for 1st Year Nil

Data Source – PMS-AIF.com | As on 31st October 2019

Abakkus 2Point2 Capital ALFAccurate Advisors Alchemy Ambit Axis Mutual Fund

Edelweiss ICICI Prudential IIFL Asset Management Invesco Kotak Marcellus

Motilal Oswal Narnolia Nippon India Prabhudas Liladhar Purnartha Renaissance

SBI Sundaram TATA UNIFI

A Few of Our PartnersWe are empanelled with all popular PMS and AIF Providers and work with open architecture

IIFL Multi Cap PMS

Date of Inception

BenchmarkFund

Manager31-Dec-2014 Nifty 50 Aniruddha Sarkar

Portfolio Holdings (Top 10 Stocks)Stock Holding % of Market ValueICICI Bank Ltd 9.50%

Bajaj Finance Ltd. 8.56%HDFC Bank Ltd 7.81%

Axis Bank Limited 6.56%Larsen Toubro Ltd. 6.20%

Procter & Gamble Health Limited 6.29%Crompton Greaves Consumer Electrical 4.28%

Asian Paints 3.69%Siemens Ltd 3.58%

Aavas Financiers Limited 3.34%

Sector Holdings (Top 5 Sectors)Sector Holding % of Market Value

Financials 43.40%Industrials 15.01%

Information Technology 11.24%Health Care 12.08%

Materials 9.00%

• The portfolio is comprised of 15-20 high-qualitycompanies which are business leaders, have a strongmanagement, low leverage and which offer a large marginof safety

• Investments pertain to largely in 2 – 4 high convictionsectors

• Identifying companies within the high conviction sectorsthat have attractive business models, strong balancesheets, good corporate governance practices and run byexcellent management teams

• Significant Alpha Generation with Low Risk (Pastportfolios have a beta of 0.7 – 0.8 which is lower thanmost mutual funds)

• Aims to target superior outperforming stocks over thebenchmark through concentrated sector or stockpositions where stocks are mostly held for the long term,typically almost always over 12 months

Performance IIFL Multicap Nifty 50

6 Months 9.58% 2.27%

1 Year 27.27% 13.66%

3 Year 13.84% 11.24%

5 Year - -

Since Inception

18.87% 9.48%

Data Source – PMS-AIF.com | As on 31st Oct 2019

ASK India Entrepreneur Portfolio (IEP)

Date of Inception

BenchmarkFund

Manager25-Jan-2010 BSE 500 Sumit Jain

Portfolio Holdings (Top 10 Stocks)Stock Holding % of Market Value

Bajaj Finance Ltd. 8.49%Bajaj Finserv Ltd 7.17%P I Industries Ltd 6.92%

Britannia Industries Ltd 6.35%Asian Paints Ltd. 5.97%

Kotak Mahindra Bank Ltd 5.96%Page Industries Ltd 5.82%

Dabur India Ltd 5.70%Pidilite Industries Ltd 5.55%

Cholamandalam Investment 5.50%


Banks 11.00%Building Products 10.80%

FMCG 10.40%NBFC 9.30%

Insurance 8.00%

• Identify large and growing business opportunities withcompetitive advantage that are significant sized (min Rs.100cr of PBT)

• The quality of the business should be good to be able tofund strong growth through internal cash generation . So,it looks for 20% compounded growth from each businessand targets over 25% growth from the portfolio

• To fund this growth, the business ROCE should be over25% so that growth can be funded and there are surplusesfor dividend

• The management should have the drive and have skin inthe game to deliver compounded growth period afterperiod (uncompromised corporate governance is a must).Hence, invest into businesses with an identifiable businesshouse at helm with minimum 25% stake.

• We seek to identify such businesses at reasonablediscount to value and stay invested for a length of timeand make money as EPS compounds

Performance ASK IEP BSE 500

6 Months 7.60% 0.60%

1 Year 19.40% 10.80%

3 Year 11.20% 9.00%

5 Year 14.40% 7.70%

Since Inception

18.70% 8.90%


AXIS Brand Equity

Date of Inception

BenchmarkFund

Manager27-Jan-2017 BSE200 Trideep Bhattarcharya

Portfolio Holdings (Top 10 Stocks)Stock Holding % of Market ValueHDFC Bank Ltd 9.30%

Bajaj Finance Ltd. 8.50%Asian Paints Ltd. 7.00%

ICICI Bank Ltd 6.80%Astral Poly Technik Ltd 6.60%

MRF Ltd 5.30%Whirlpool of India Ltd 5.00%

HDFC Standard Life Insurance Company 4.70%Kansai Nerolac Paints Ltd. 4.60%

V-Guard Insutries Ltd 4.40%


Finance 35.60%Consumer 29.20%

Capital Goods, E&C 7.70%Industrial Products 7.00%Autos & Logistics 5.30%

Brands not only help to create a strong recall in the minds ofconsumers but also make for a worthy investment theme.Companies with brands create a distinct bargaining powerdue to economies of scale, high entry barriers, strong pricingpower and/or operating in under-penetrated markets. Thesetranslate into superior margins and growth.• Bottom-up” stock pick up is followed, and higher

allocations are given to “best-ideas after bottom upresearch” within the frame of “strong-brands”.

• Portfolio is constructed as a “balanced-mix” ofestablished brands as well as emerging brands.

• Portfolio follows multi cap investment strategy withexposures across various sectors and market-capitalization.

• Portfolio strives for enhanced risk adjusted returns andfollows screening mechanism to select qualitybusinesses.

• Portfolio follows low churn and companies are selectedwith over 3 years perspective.

Performance Axis Brand Equity BSE200

6 Months 11.50% 1.40%

1 Year 22.70% 12.20%

3 Year - -

5 Year - -

Since Inception

13.40% 10.20%


MARCELLUS Consistent Compounders

Date of Inception

BenchmarkFund

Manager01-Dec-2018 Nifty 50 Rakshit Ranjan


Berger Paints Limited 11.95%Asian Paints Limited 11.92%

Bajaj Finance Limited 7.09%Dr Lal Pathlabs Limited 6.99%

Abbott India Limited 4.30%


Consumer staples 14.00%Consumer discretionary 21.00%

Pharma & Healthcare 10.00%Financials 26.00%

Home building Materials 28.00%

It identifies firms with high pricing power that helps sustaina wide gap between returns on capital employed and cost ofequity. The portfolio aims to hold such firms for 8-10 yearson average where healthy returns are generated withvolatility like that of a government bond. PortfolioConstruction involves a two-stage process:

• Filter based approach to create an investibleuniverse of 30-35 stocks

• In-depth bottom-up research of such companiesin the universe to assess sustainable competitivemoats to build a portfolio of 10-20 stocks thatdeliver healthy compounded earnings growthover long periods of time.

Corporate Governance:- The foremost step to building aninvestment portfolio is to identify and staying awayfrom companies which are not clean in terms of accounting. This is the universe of companies that is studied forinvesting.

Performance Marcellus CC Nifty 50

6 Months 22.50% 2.10%

1 Year - -

3 Year - -

5 Year - -

Since Inception

28.90% 10.70%


MOTILAL India Opportunities Portfolio (IOP)

Date of Inception

BenchmarkFund

Manager15-Feb-2010 Nifty Smallcap 100 Manish Sonthalia

Portfolio Holdings (Top 10 Stocks)Stock Holding % of Market ValueDCB Bank Ltd. 10.38%

ICICI Securities Ltd. 7.91%TTK Prestige Ltd. 7.36%

Birla Corporation Ltd. 7.06%Mahanagar Gas Ltd. 6.74%

Blue Star Ltd. 6.45%Aegis Logistics Ltd. 6.13%Dr. Lal Pathlabs Ltd. 6.13%

Alkem Laboratories Ltd. 5.98%ICICI Bank Ltd. 5.96%

Sector Holdings (Top 5 Sector)Sector Holding % of Market Value

Banks 16.33%NBFC 14.31%

Consumer Durable 13.03%Oil and Gas 12.87%

Cement & Infrastructure 8.52%

Investment philosophy is centered on BUY RIGHT: SIT TIGHTprinciple.

Buy Right is represented by – (QLGP)

• “Q” denotes the quality of the business and management

• “G” denotes growth in earnings and sustained RoE

• “L” denotes longevity of the competitive advantage or economic moat of the business

• “P” denotes our approach of buying a good business for a fair price rather than buying a fair business for a good price

Sit Tight

• Buy and Hold: Strictly buy and hold and believe that picking the right business needs skill and holding onto these businesses to enable investors to benefit from the entire growth cycle needs even more skill.

• Focus: High conviction portfolios with 25 to 30 stocks being our ideal number. We believe in adequate diversification but over-diversification results in diluting returns and add market risk.

Performance Motilal IOP Nifty Smallcap

6 Months -7.59% -11.17%

1 Year -0.67% -5.24%

3 Year -2.87% -4.03%

5 Year 8.68% 2.23%

Since Inception

10.87% 5.33%


AMBIT Good and Clean

Date of Inception

BenchmarkFund

Manager12-Mar-2015 BSE Midcap Aishvarya Dadheech


P I Industries Ltd 7.40%Page Industries Ltd 7.10%

Cholamandalam Investment and Finance 7.10%City Union Bank Ltd. 7.00%

Torrent Pharmaceuticals Ltd. 6.30%


Financials 29.00%Consumer Discretionary 24.00%

Specialty Chemicals 14.00%Pharmaceuticals 12.00%

Homebuilding 12.00%

(A) Good – Selection of companies based on capitalallocation track record and quality of improvement infinancial metrics over the past six years

(B) Clean – Selection of companies based on the quality oftheir accounts and corporate governance.

The ‘Good’ strategy helps generate upside while notcompromising on the ‘Clean’ strategy, which reducesdownside risk. Essentially, while the objective is to generatereturns, the even bigger goal is to better manage drawdowns because the company believes doing the lattersuccessfully is critically vital in achieving the former.

Ambit’s proprietary forensic accounting framework helpsweed out firms with poor quality accounts and helps identifyefficient capital allocators with a holistic approach toconsistent growth. It results in a concentrated portfolio of15-16 stocks that draws down lesser than the market incorrections and has low churn (not more than 15-20% in anyyear amounting to 2-3 holdings being replaced).

Performance Ambit G & C Nifty 50

6 Months 4.60% -4.20%

1 Year 22.00% -2.10%

3 Year 12.50% 1.90%

5 Year - -

Since Inception

12.40% 5.10%


VALUATIONS FAVOUR MID – CAPSThe journey to higher double digit returns in equity investing goes through dark patches and sees bright sunlight.

The inflection point or the new dawn in return trajectory for Indian shares could be visible soon. The awaiting dawn could be more rapidly approaching us in the Mid Cap space. This spacehas often been referred to as a searching ground for investors for finding quality companies. PMS AIF WORLD (www.pms-aif.com), presents a case for investing in Mid-Caps, and a selectedlist of a few PMSes with substantial weights in Mid and Small Cap Companies.

The mid cap space has been battered and bruised and, in some cases, burned. This was last time seen in 2013, when most mid-caps traded dirt cheap. Things started turning around 2014onwards and most mid-caps delivered superb returns till Jan 2018. In a similar scheme of things, are mid-caps right now, and seem to be ready to out-perform after seeing massivecorrection in last 20 months. The valuation divergence between mid and large cap indices has been at all time high and some mean reversion is expected, in fact the mean reversion hasbegun, as is visible already. The value of institutional holding in the 1,250 companies (after the top 250) dropped by 40% to INR2.9 lakh crore between December 2017 and June 2019,currently, 55% of the institutional holding is in the top 20 stocks and only 1% in the bottom 1,000 stocks (501 to 1,500). This has not been the case always and we expect quality mid-capsto again see institutional buying interest.

Amongst PMSes with more than 35% allocation to mid-small caps, these 12 names have been picked based on long term out-performance on their respective benchmarks.

For investors seeking mid cap exposure, a Multicap route should be a preferred one as the large cap portion in a Multicap PMS provides more stability to the portfolio and mid cap portionadds to superior pace of performance.

PMS PRODUCT FACTS PERFORMANCE

PMS CategoryDate of

inceptionFund Manager

Number Of Stocks

AUMLarge Cap

Mid Cap

Small Cap

Cash 1 M 3 M 6 M 1 Y 2 Y 3 Y 5 YPMS

Return –SI

BenchmarkBenchmark Return - SI

Motilal IOP 1 Mid Cap 15-Feb-2010 Manish Sonthalia 23 2994 8.00% 31.60% 59.70% - 0.54% 5.28% -7.59% -0.67% -13.31% -2.87% 8.68% 10.87% Nifty Smallcap 100 5.33%

Ambit Good and Clean Mid Cap 12-Mar-2015 Aishvarya Dadheech - 140 20.00% 40.00% 35.00% 5.00% 1.00% 11.10% 4.60% 22.00% 11.20% 12.50% - 12.40% Nifty MidCap 100 5.10%

Nippon Emerging India Mid Cap 7-Mar-2017 Varun Goel 23 - 71.00% 12.00% 16.00% - 3.15% 9.72% 1.69% 9.06% -1.56% - - 6.45% Nifty MidCap 100 0.81%

Sundaram SELF Mid Cap 1-Jun-2010 Madangopal Ramu 23 273 14.00% 33.00% 45.00% 8.00% 2.10% 13.00% 2.10% 13.90% 0.50% 7.00% 11.70% 15.80% NSE MidCap 8.10%

Alchemy High Growth Multi Cap 8-May-2002 Amit Nadekar 20 2698 60.00% 30.00% 10.00% - 3.30% 8.60% 0.80% 8.50% 1.40% 7.70% 10.80% 23.00% BSE500 15.70%

IIFL Multi Cap Multi Cap 31-Dec-2014 Aniruddha Sarkar 28 1500 58.37% 26.40% 11.51% 3.71% 3.27% 10.47% 9.58% 27.27% 12.73% 13.84% - 18.87% BSE 200 9.48%

Motilal NTDOP Multi Cap 5-Dec-2007 Manish Sonthalia 26 9306 46.60% 50.70% 2.50% - 2.99% 11.53% 3.95% 8.22% 1.39% 6.92% 16.16% 16.10% Nifty 500 5.57%

2Point2Capital Multi Cap 19-Jul-2016 Amit Mantri | Savi Jain 13 338.9 3.65% 19.33% 64.26% 12.76% -0.10% 6.50% 2.20% 19.10% 8.40% 15.30% - 17.60% Nifty 50 12.10%

AlFaccurate Advisors Multi Cap 23-Nov-2009 Rajesh Kothari 48 589.67 54.00% 23.00% 19.00% 4.00% 2.89% 8.51% 0.56% 5.30% -2.80% 6.60% 12.30% 18.20% BSE 500 -

Invesco RISE Multi Cap 18-Apr-2016 Amit Nigam 20 688.75 25.86% 34.00% 33.09% - 3.08% 4.89% -5.01% -3.20% -5.11% 9.04% - 12.87% BSE 500 11.76%

SBI Growth with Values Multi Cap 11-Jul-2016 Aparna Shanker 23 - 36.52% 17.00% 45.01% 1.47% 2.30% 10.10% 8.19% 20.10% 4.93% 9.43% - 9.91% BSE 500 10.31%

ICICI Prudential Contra Multi Cap 14-Sep-2018 Parag Thakkar 20 199.77 61.60% 19.80% 18.60% - 2.40% 4.35% 2.04% 16.78% - - - 13.13% BSE 200 0.69%

Thank youDisclaimer:PMS AIF World is an Alternative Investments Focussed Full Services Brand owned byHeWePro Consultants Private Limited. We provide analytics backed quality and informedinvesting with an endeavour for long term wealth creation and prosperity. The performancedata that we publish, is taken from the latest factsheets procured from respective productproviders. The data presented is as of 31st Oct 2019. Performance up to 1 Year is absoluteand above 1 Year is annualized. We’ve taken due care in collating the data from respectiveproviders and its published on the best effort basis. The accuracy of the data cannot beguaranteed. PMS AIF World would not be held responsible for any investment decisionsarising from use of this data whatsoever. Investments are subject to market related risks. Pastperformance may or may not be sustained in future and should not be solely referred as abasis for any investment decisions. Please read the disclosure documents carefully beforeinvesting.Portfolio Management Services are market linked and do not offer any guaranteed/assuredreturns.

ContactFor any queries or partnering with us, youcan reach out to us.

Lovish [email protected] | +91 8882321898

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