The month of June presented a blockbuster rally in the Indian stock market, both the market Indices NIFTY 50 and BSE Sensex to climb to their all-time highs. The month ended on the back of strong inflows from foreign institutional investors (FIIs), robust corporate balance sheets, moderating inflation and growth picking up coupled with expectations of a normal monsoon season, all of which bolstered the sentiment of market participants.
Sameeksha PMS gained 6.5% (net of all fees and expenses), and carved a strong outperformance (alpha) when compared to the benchmark BSE500TRI which gained 4.3%.
It is worth reviewing key aspects of our performance as summarized below:
| Particulars | Summary of our performance | |
| 1. | Fund performance on a Financial Year basis and Calendar Year basis (Refer Table 1 and 2) | Delivered alpha (outperformance over the benchmark1) in six out of eight financial yearsincluding the current incomplete FY 24. Aggregate annual alpha over all the eight financial years ~ 45.3% Delivered alpha (outperformance over the benchmark1) in five out of eight calendar years including the current incomplete CY 23. Aggregate annual alpha over all the eight calendar years ~ 47.6% |
| 2. | Aggregate portfolio returns as of June 30, 2023 (Refer Table 3) | From inception2 till June 30th 2023, Sameeksha PMS has delivered annualized alpha of 5.6%.For the five year and three year periods ending 30th June 2023, Sameeksha PMShasdelivered annualized alpha of 10% and 9% respectively. |
| 3. | Risk Adjusted Ratios: Lower risk, Higher Return (Refer Table 5) | Our portfolio beta (0.9) has been lower than the benchmark, and our returns have been higher than the benchmark since inception, implying superior risk adjusted performance |
| 4. | Fund performance on a rolling period basis (Refer Table 6, Table 7 and Table 8) | Five year rolling period since inceptionAlpha delivered 100% of the time (i.e 28 out of 28 observations)Median alpha ~ 7%Three year rolling period since inceptionAlpha delivered 96% of the time (i.e 49 out of 51 observations)Median alpha ~ 9% For the rolling five year periods (28 observations), we have been in the Top Quartile and Top Decile 100% of the time. For the rolling three year periods (51 observations), we have been in the Top quartile 92% of time and Top Decile 68% of the time. |
| 5. | Returns of Individual portfolios (Refer Table 9) | As Sameeksha PMS does not follow a model portfolio approach, tracking individual client performance becomes more relevant. All the clients with an age of account from six months to seven years have realized annualized alpha, with an average of 7.2%. Almost 75% of our assets under management can be attributed to clients who have a tenure of over seven years with us |
| 6. | PMS Universe rankings (Refer Table 10) | Among multicap PMSes with AUM more than INR 100 crs asnof June 30th 2023, Sameeksha is ranked 1st out of 49 funds for five year period and 8th out of 66 PMSes for the three year period as per performance reported to PMS Bazaar. Further, among multicap PMSes with AUM more than INR 100 crs as of June 30th, 2023, Sameeksha is ranked 4th out of 122 funds for five year period performance among PMSes that disclose their name and performance on the website of Association of Portfolio Managers of India (APMI) |
| 7. | Performance across pre, during and post Covid periods (Refer Table 11) | From inception (1st April 2016) till February 29, 2020 (Pre-Covid Period), delivered annualized alpha of 3.1%Between February 29, 2020 and June 30, 2022, (Covid Period) delivered annualized alpha of 8.3%Between June 30, 2022 and June 30 2023, (Post Covid Period) delivered annualized alpha of 9.3% |
Three important things must always be kept in mind when looking at performance data. First, for funds such as ours that do not follow model portfolio strategy, the performance of individual clients for different duration is important to look at. Second, some PMSes may be charging fees outside the PMS and hence after fees, performance data may not be comparable to ours. Third, it is important to look at not only portfolio returns but also risk adjusted ratios. We provide data to address all three points later in this note.
Aggregate Fund Performance On A Financial Year And Calendar Year Basis
For the month of June, Sameeksha PMS has outperformed the benchmark BSE 500 TRI by generating 6.5% returns against the benchmark BSE500TRI returns of 4.3%. Looking at our performance over the financial years (Table 1), we have outperformed our benchmark in six out of eight financial years (including the current incomplete financial year). Key however is that the sum of outperformance of 55% in those six years far exceeds the sum of underperformance of 10% in the remaining two years. Furthermore, if we are able to sustain the outperformance achieved so far in this financial year for the rest of the year, it will become a streak of five consecutive years of generating alpha.
| Table 1: Absolute and relative performance (Financial Year) | |||
| Year ended | % Performance | ||
| Portfolio (A) 1 2 | S&P BSE 500 TRI (B) | Alpha vs S&P BSE 500 TRI (A-B) | |
| 31.03.2024 3 | 17.4 | 13.2 | 4.2 |
| 31.03.2023 | 4.5 | (0.9) | 5.4 |
| 31.03.2022 | 23.4 | 22.3 | 1.1 |
| 31.03.2021 | 106.3 | 78.6 | 27.7 |
| 31.03.2020 | (13.0) | (26.5) | 13.5 |
| 31.03.2019 | 1.4 | 9.7 | (8.3) |
| 31.03.2018 | 11.7 | 13.2 | (1.5) |
| 31.03.2017 | 28.7 | 25.5 | 3.2 |
For the calendar year 2023 till date, we have positioned ourselves well by outperforming the benchmark BSE500 TRI by 9.2%. However, for the completed calendar year 2022, we have underperformed the benchmark BSE500 TRI by 6.8% (Table 2). This can be mainly attributed to the onset of the Ukraine-Russia war at the start of the calendar year and the ensuing global economic crisis. Nonetheless, we have taken corrective actions since then and we hope to have a good calendar year 2023. However, we have outperformed the benchmark in five out of eight calendar years and the sum of outperformance of 64% in five years far exceeds the sum of underperformance of 16% in the remaining three years.
| Table 2: Absolute and relative performance (Calendar Year) | |||
| Year ended | % Performance | ||
| Portfolio 1 2 | BSE 500 TRI | Alpha vs S&P BSE 500 TRI (A-B) | |
| 31.12.20233 | 16.0 | 6.8 | 9.2 |
| 31.12.2022 | (2.0) | 4.8 | -6.8 |
| 31.12.2021 | 48.2 | 31.6 | 16.6 |
| 31.12.2020 | 45.2 | 18.4 | 26.8 |
| 31.12.2019 | 19.8 | 9.0 | 10.8 |
| 31.12.2018 | (9.9) | (1.8) | -8.1 |
| 31.12.2017 | 36.0 | 37.6 | -1.6 |
| 31.12.2016 | 10.0 | 9.4 | 0.6 |
It is important to note that we delivered this alpha despite maintaining a median cash level of 13.3% across the eight financial years. Further, our PMS has delivered a substantial aggregate annual alpha of 43% over BSE500 TRI implying average alpha of 5% since inception (Table 3).
| Table 3: Key data on alpha generation over eight2 financial years since inception1 | |||
| Key Indices | Aggregate alpha generated % | Average alpha generated% | % times alpha generated over 8 FYs |
| BSE500 TRI | 45.3 | 5.7 | 75% |
Aggregate Portfolio Returns Over Various Time Periods
It is important to note that we have maintained relatively higher levels of cash (13.3% on average over the entire period from inception) from time to time over the duration of managing the portfolio. Notwithstanding the same, from inception as well as over five and three years respectively, we have generated returns of 20.9%, 24.1% and 35.0% beating the benchmark BSE500 TRI returns of 15.3%, 13.9% and 26.4% respectively after fees and expenses. We have delivered strong returns relative to benchmark across various key time periods. (Table 4).
| Table 4: Portfolio % performance since inception | |||
| Period | Portfolio % 1 2 (A) | S&P BSE 500 TRI % (B) | Alpha vs BSE500 TRI % (A-B) |
| Since Inception 3 4 | 20.9 | 15.3 | 5.6 |
| 5 Years | 24.1 | 13.9 | 10.2 |
| 3 Years | 35.0 | 26.4 | 8.6 |
| 2 Years | 13.5 | 11.7 | 1.8 |
| 1 Year | 33.9 | 24.0 | 9.9 |
| 6 Months | 16.0 | 6.8 | 9.2 |
| 3 Months | 17.4 | 13.2 | 4.2 |
| 1 Month | 6.5 | 4.3 | 2.3 |
Risk Adjusted Ratios: Not All Returns Are The Same: Higher Returns At Lower Risk
When compared on a risk-adjusted basis, our PMS shows an even stronger performance with a risk-adjusted alpha generation of 5.6% over the broader market benchmark since its inception. While our portfolio beta has been materially lower than our benchmark, our returns have been higher than the benchmark since inception, implying superior strong risk adjusted returns.
Furthermore, other risk-adjusted returns – Sharpe ratio and Treynor ratio, are also significantly higher than the benchmark indices (Table 5).
| Table 5: Risk-Adjusted Performance Ratios 1 | ||
| Performance Indicators | V/s BSE 500 | |
| Portfolio | Index | |
| Jensen’s Alpha (x) | 5.9 | 0 |
| Treynor Ratio (x) | 22.2 | 15.9 |
| Sharpe Ratio (x) | 1.1 | 0.9 |
| CAPM Beta(x) | 0.9 | 1 |
| R – Squared (%) | 0.76 | 100 |
Aggregate Fund Performance And Ranking On A Rolling Period Basis
Rolling returns are a more useful indicator of consistency in performance versus single period returns. For the rolling three year periods applicable to our entire operating history, Sameeksha PMS has delivered aggregate annualized alpha 96% of the times (49 out of 51 observations) ranging from 0.4% to 23%. For the rolling five year periods applicable, Sameeksha PMS has delivered aggregate annualized alpha 100% of the time (28 out of 28 observations) ranging from 5% to 10% (Table 6).
| Table 6: Number of times alpha1 generated over rolling five and three year periods | ||
| Particulars | Rolling Five Year periods | Rolling Three Year periods |
| Number of observations | 28 | 51 |
| Number of times alpha generated | 28 | 49 |
| % times alpha generated | 100% | 96% |
| Median annualized alpha | 7% | 9% |
| Maximum annualized alpha | 10% | 23% |
| Minimum annualized alpha | 5% | 0.4% |
For the rolling three year periods applicable to our entire operating history, we have been ranked among the multicap universe in the Top Decile 67% of the time (34 out of 51 observations) and in the Top Quartile 92% of the time (47 out of 51 observations). For the remaining 8% observations, we were ranked in the Second Quartile (Tables 7 and 8). For the rolling five year periods applicable for our entire operating history, we have been ranked among the multicap universe in the Top Decile 100% of the time (28 out of 28 observations).
| Table 7: Decile distribution of our rank within the Multicap PMS universe on a rolling basis since April 2019 | |||
| Particulars | One Year | Three Years | Five Years |
| Number of Observations | 51 | 51 | 28 |
| Top Decile 1 | 39% | 67% | 100% |
| 9th Decile 2 | 24% | 22% | 0% |
| 8th Decile | 14% | 8% | 0% |
| 7th Decile | 2% | 2% | 0% |
| 6th Decile | 8% | 2% | 0% |
| 5th Decile | 4% | 0% | 0% |
| 4th Decile | 6% | 0% | 0% |
| 3rd Decile | 4% | 0% | 0% |
| Total | 100% | 100% | 100% |
| Table 8: Quartile distribution of our rank within the Multicap PMS universe on a rolling basis since April 2019 | |||
| Particulars | One Year | Three Years | Five Years |
| No. of Observations | 51 | 51 | 28 |
| Top Quartile 1 | 71% | 92% | 100% |
| 2nd Quartile 2 | 22% | 8% | 0% |
| 3rd Quartile | 4% | 0% | 0% |
| 4th Quartile | 4% | 0% | 0% |
| Total | 100% | 100% | 100% |
Returns Of Individual Portfolios
Because we don’t follow model portfolio strategy, the performance of individual clients is far more important than overall portfolio aggregate returns (Table 9). For investors who are with us for 3 years and more, Sameeksha PMS has returned a very substantial alpha with an average annualized alpha of approx. 8% for the three year period ending 30th June 2023. Similarly, for investors who are with us for 5 years or more, Sameeksha PMS has returned substantial alpha with an average annualized alpha of approx. 11% for the five year period ending 31st May 2023. The table below shows the average annualized returns and alpha over different periods of time of all the clients as on 31st June 2023.
| Table 9: Performance of All Client Portfolios across various duration | |||||||||
| Median Age of Accounts 2 3 4 | Since Inception | Five Years(Benchmark1 Return = 13.9%)2 | Three Years(Benchmark1 Return = 26.4%) 2 | Two Years(Benchmark1 Return = 11.7%)2 | |||||
| Average Returns 5 | Average Benchmark Returns1 | Alpha | Average Returns 5 | Alpha | Average Returns 5 | Alpha | Average Returns 5 | Alpha | |
| 7 Years | 20.7 | 14.7 | 6.0 | 24.2 | 10.3 | 34.8 | 8.4 | 11.1 | -0.6 |
| 6.5 Years | 20.2 | 14.2 | 6.1 | 24.3 | 10.4 | 35.1 | 8.7 | 13.8 | 2.1 |
| 6 Years | 19.0 | 13.4 | 5.7 | 24.2 | 10.4 | 35.0 | 8.6 | 12.5 | 0.8 |
| 5.5 Years | 19.7 | 12.7 | 7.0 | 23.7 | 9.9 | 33.2 | 6.7 | 11.6 | -0.1 |
| 5 Years | 25.4 | 13.3 | 12.0 | 26.2 | 12.4 | 35.0 | 8.6 | 14.1 | 2.3 |
| 4.5 Years | 27.3 | 16.0 | 11.2 | – | – | 34.0 | 7.6 | 15.0 | 3.3 |
| 4 Years | 25.3 | 15.2 | 10.1 | – | – | 32.3 | 5.9 | 10.9 | -0.8 |
| 3.5 Years | 29.1 | 17.3 | 11.7 | – | – | 33.0 | 6.6 | 12.3 | 0.6 |
| 3 Years | 30.9 | 25.2 | 5.7 | – | – | 34.3 | 7.9 | 13.7 | 2.0 |
| 2.5 Years | 23.0 | 18.1 | 4.9 | – | – | – | – | 14.0 | 2.3 |
| 2 Years | 11.4 | 10.8 | 0.5 | – | – | – | – | 12.2 | 0.5 |
| 1.5 Years | 14.9 | 7.7 | 7.2 | – | – | – | – | – | – |
| 1 Year | 23.4 | 14.2 | 9.1 | – | – | – | – | – | – |
| 6 Months | 13.4 | 9.6 | 3.8 | – | – | – | – | – | – |
Performance Within The PMS Universe
We continue to maintain our top rankings both within the multicap PMS universe as well as the entire PMS universe for key periods of three and five years. The multicap PMS universe rankings are more relevant to us since we follow the multicap strategy.
In the interest of a fair comparison, we present our rankings among those multicap PMSes with AUM more than INR 100 crs. Within this universe, we are 1st out of 49 PMSes for the five year period and 8th out of 66 PMSes for three year period, highlighting our superior performance over the long term periods (Table 10). Among the multicap universe (considering all AUM), we are consistently ranked in the Top Decile for the five year period for all 28 out of 28 observations reflecting well on the consistency of our performance.
| Table 10: Comparison with PMS Multicap Universe as of 30th June 2023 | ||||
| Fund or Category / Returns Generated 1 2 | 1 year (%) | 2 year (%) | 3 year (%) | 5 year (%) |
| Sameeksha PMS | 33.9 | 13.5 | 35.0 | 24.0 |
| Multicap Universe Average | 27.1 | 11.0 | 27.4 | 13.7 |
| Decile Rank within the Multicap Universe | 9th Decile | 7th Decile | 9th Decile | Top Decile |
| Percentile Rank within the Multicap Universe | Top 16% | Top 30% | Top 11% | Top 1% |
| Rank within the Multicap Universe 3 4 5 6 | 13th out of 77 | 23rd out of 74 | 8th out of 66 | 1st out of 49 |
Performance Of PMS Over The Covid Timeline (Pre, During, And Post)
The Covid Pandemic induced significant volatility in the equity markets. Hence, it is useful to look at the performance across three time slices : Pre Covid, During Covid and Post Covid. Sameeksha PMS has outperformed the benchmark across all of these three time periods with meaningful alpha (Table 11). This consistency of performance may be an important factor in comparing us with the other funds.
| Table 11: Absolute and Annualised returns1 – Pre, During, and Post Covid | ||||||
| Duration | Absolute Portfolio Returns(%) (A) | Absolute BSE500TRI Returns (%) (B) | Alpha % (A-B) | Annualised Portfolio Returns (%) (C) | Annualised BSE500TRI Returns (%) (D) | Alpha % (C-D) |
| 01.04.2016 to 29.02.2020 (Pre Covid) | 67.6 | 50.6 | 17.0 | 14.1 | 11.0 | 3.1 |
| 01.03.2020 to 30.06.2022 (During Covid) | 76.0 | 50.4 | 25.6 | 27.5 | 19.1 | 8.3 |
| 01.07.2022 to 30.06.2023 (Post Covid) | 33.2 | 23.9 | 9.3 | 33.2 | 23.9 | 9.3 |
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. 395, far outpacing what one would have earned by investing in a fund that achieved benchmark returns (Figure 1).
Analyzing The Sector Performance During The Month
During the month, Sectors that showed growth include Healthcare, Auto & Ancillaries and Infrastructure. For Sameeksha PMS, the Healthcare, Diamond & Jewellery, and Aviation were outperformers compared to the benchmark. However, due to our lack of exposure towards Auto & Ancillaries we missed out on participating in the upturn. Below is the attribution analysis for the month of June 2023 (Table 12).
| Table 12: Sector Wise Attribution Analysis 1 for the month of June 2023 | |||
| Sector | Portfolio Contribution | Benchmark Contribution | Difference |
| Healthcare | 1.38% | 0.43% | 0.95% |
| Diamond & Jewellery | 1.02% | 0.08% | 0.94% |
| Aviation | 0.58% | 0.02% | 0.56% |
| IT | 0.68% | 0.17% | 0.51% |
| Trading | 0.27% | -0.03% | 0.30% |
| Electricals | 0.28% | 0.02% | 0.26% |
| Retailing | 0.30% | 0.10% | 0.20% |
| Insurance | 0.30% | 0.14% | 0.16% |
| Finance | 0.84% | 0.71% | 0.13% |
| Hospitality | 0.12% | 0.00% | 0.12% |
| Bank | 0.38% | 0.28% | 0.10% |
| Capital Goods | 0.21% | 0.14% | 0.07% |
| Textile | 0.04% | 0.02% | 0.02% |
| Gas Transmission | 0.00% | -0.02% | 0.02% |
| Mining | 0.00% | -0.02% | 0.02% |
| Paper | 0.00% | 0.00% | 0.00% |
| Ratings | 0.00% | 0.00% | 0.00% |
| Realty | 0.06% | 0.07% | -0.01% |
| Logistics | 0.00% | 0.01% | -0.01% |
| Abrasives | 0.00% | 0.01% | -0.01% |
| Miscellaneous | 0.00% | 0.01% | -0.01% |
| Alcohol | 0.00% | 0.01% | -0.01% |
| Ship Building | 0.00% | 0.01% | -0.01% |
| Media & Entertainment | -0.03% | -0.02% | -0.01% |
| Diversified | 0.00% | 0.01% | -0.01% |
| Non – Ferrous Metals | 0.00% | 0.02% | -0.02% |
| Consumer Durables | 0.00% | 0.03% | -0.03% |
| Agri | 0.00% | 0.03% | -0.03% |
| Construction Materials | 0.00% | 0.05% | -0.05% |
| Inds. Gases & Fuels | -0.05% | 0.00% | -0.05% |
| Plastic Products | -0.02% | 0.04% | -0.06% |
| Telecom | 0.00% | 0.10% | -0.10% |
| Power | 0.00% | 0.11% | -0.11% |
| Chemicals | -0.06% | 0.09% | -0.15% |
| FMCG | 0.01% | 0.16% | -0.15% |
| Iron & Steel | 0.00% | 0.21% | -0.21% |
| Crude Oil | 0.00% | 0.24% | -0.24% |
| Automobile & Ancillaries | 0.19% | 0.44% | -0.25% |
| Infrastructure | 0.00% | 0.30% | -0.30% |
Disclaimer – The information contained in this update is provided by our fund accounting platform and is not audited.
