Appendix 1: Performance of the fund for FY2023

 

In this tough financial year 2022-23, Sameeksha PMS has managed to generate positive absolute return as well as meaningful outperformance as compared to the benchmark BSE500 TRI. For the year, the PMS outperformed the benchmark by 5.43%, with an average cash level of 11% during the year. Moreover, compared to BSE Midcap TRI and BSE SmallCap TRI we had an outperformance of 3.5% and 8.2% respectively.

 

As shown in Table 2, we raised the cash levels of the portfolio during the first half of FY 2022-23. We observed at the start of the year that inflation was stubborn and high and RBI was likely to raise interest rates or maintain at elevated levels.  Rural spending was soft with weakness in consumer related data. High Energy prices were also a factor. Furthermore, the pent-up demand post Covid appeared to be tapering off. At the same time, data points suggested material risk of slow down in western economies as the Ukraine war lingered on and had its impact on energy prices. Inflation waged high in western economies resulting in rise in interest rates and that affected the outlook of Indian companies that depended  on exports. 

 

1. Month end. 2.  Post fees and expenses 3. Aggregate Portfolio

 

As such, early in the year, we took a decision to reduce our exposure and even exited some positions that we saw were high risk. The performance of stocks we exited has been mixed. (Table 3). 

 

1. Stocks sold as we increased our cash level 2. Performance calculated post exit date 3. It remains one of the largest positions in the portfolio.

 

Meanwhile, we saw deeper correction in small and mid cap stocks and that presented us with many opportunities. We chose to take advantage of that and redeployed capital in the small cap space as clearly visible from our increasing exposure to small cap (Table 2). The performance of stocks that were bought during the year has been fairly strong overall (Table 4).