August 2021: Top or among the top rank for three and five years despite subdued month due to elevated cash level

Following a consecutive streak of eight months of outperformance, Sameeksha PMS finally saw a  month of underperformance due to an elevated Cash level.  During the month, we carried an average cash level of 19% with a high of 25% and a low of 15%. As a result, we saw our PMS generate returns of 4.2% versus our benchmark of CNX500 TRI delivering 6.6% returns. Indeed, the invested part of the portfolio did better than the benchmark indicating that our stock selection and portfolio sizing continues to be quite effective. 

Since its inception, Sameeksha PMS has generated a return of 24.8% versus the benchmark CNX500 TRI returns of 17.6% while maintaining average cash levels in mid teens. Notwithstanding a very strong rally in small and mid-cap stocks over the last 16 months, we continue to rank among the best. We achieved three and five year CAGR returns of 35.6% and 24.6% respectively, easily outpacing the benchmark and putting us as the best or among the best performing funds in India depending on the time period.

Portfolio Returns

Broader markets remained upbeat for August 2021 with the exception of small-caps showing negative returns after rallying for the most part of the last year.

For August 2021, we had another good month on an absolute (up 4.2%) basis. Our benchmark CNX500 TRI returned 6.6%. This slight underperformance can largely be attributed to our elevated cash levels of approximately 19%. For the other relevant periods, we have strongly outperformed our benchmark index  as can be observed in Table 1.

Performance within the PMS Universe

We continue to maintain our top rankings both within the multi-cap PMS universe as well as the entire PMS universe.  For the three year period, we are ranked number one out of eighty one PMSes. In the same vein, we are ranked third out of fifty six funds for the five year period comparison within the Multicap universe – highlighting our superior performance over the long term. 

Strong performance in mid and small-cap stocks for most part of the year has enabled PMSes focussed on those categories to deliver strong one-year performance. However, over longer periods of three and five years, we have retained our top decile position when compared with the entire PMS universe (Table 3). We are ranked 4th out of 98 funds based on five-year data and 2nd out of 154 funds for three-year data.

Comparison of Rolling Returns with other funds

Rolling returns provide a much better comparison than a snapshot of one period. We continue to come out extremely well on this measure on a three-year basis when compared to the PMS universe as well as relevant categories of mutual funds – focused, flexi-cap, small-cap, mid-cap, value, and contra funds  (Table 4). We have continued to maintain our top decile ranking across both our comparable universe of Multicap PMSes as well as across the entire PMS universe.

Similarly, our rolling one-year returns have been strong as well and we have maintained our rankings in the top two deciles across the PMS universe, consistently in the last two years (Table 5).

Performance Of Individual Portfolios

The portfolio returns of our clients continue to outpace the benchmarks by a significant margin irrespective of their investment timings (Table 6). Investors across the time horizon have reaped returns far exceeding the benchmark returns through their investment with Sameeksha PMS.

Cumulative Performance versus the benchmark

Sameeksha’s outperformance over its benchmark has continued to widen positively over the years. An investment of Rs. 100 with us since inception (April 2016) would have grown to Rs. 332, far outpacing what one would have earned by investing in a fund that achieved benchmark returns (Figure 1).

Fund Performance on a Financial Year basis 

Sameeksha PMS generated a return of 27.1% in four months (April – August 2021) of the current financial year ending March 2022, outperforming its benchmark index CNX 500 TRI – which returned 18.9% over the same period (Table 7). 

This outperformance has been achieved despite maintaining average cash levels of 11% in our portfolio –  indicating strong risk-adjusted returns as well. 

Risk-Adjusted Ratios

When compared on a risk-adjusted basis (Table 8), our PMS shows even stronger performance with a risk-adjusted alpha generation of 8.5% over the broad market benchmark since its inception.

Furthermore, other risk-adjusted returns – Sharpe ratio and Treynor ratio, are also significantly higher than the benchmark indices (Table 8).

Please let us know if you have any questions.

Disclaimer : The information contained in this update is based on data provided by our fund accounting platform and is not audited.