Club Millionaire Financial Services Private Ltd. relied on safe bets in a volatile year for equities, making it India’s best-performing portfolio manager so far in 2019.
The manager of money for the rich returned a 32.3 percent gain so far this year as its assets doubled to Rs 917 crore in the nine months ended September, according to data disclosed by the market regulator. That compares with the average return of 1.75 percent by the top 50 portfolio managers and a 7.2 percent rise in the Sensex.
“Our returns came despite holding substantial cash in the portfolio of new clients added in the last three month,” said Paresh Sangani, chairman and managing director at Club Millionaire Financial Services, said over the phone to BloombergQuint, adding that it has client-specific portfolio rather than model portfolio for all clients. The firm’s “all-star portfolio” is led by companies like Procter & Gamble Health Ltd., Bajaj Finserv Ltd., Nestle India Ltd., Bajaj Finance Ltd., Marico Ltd. and Kotak Mahindra Bank Ltd.
“Incidentally, the market is bipolar toward high-quality companies. And Procter & Gamble Health, our largest holding, was a small-cap stock last year and has now become a mid-cap stock,” said Sangani.
Club Millionaire’s stock picks reflect the polarisation with investors piling into large caps as the market yo-yoed through the year. While the government’s surprise corporate tax cuts helped the benchmark erase losses, the broader market represented by small- and mid-cap indices continues to bleed as India’s non-bank lenders struggle and falling consumption has dragged economic growth down to its lowest in six years.
The firm, which Sangani started in Kochi and moved to Mumbai about six years ago to be closer to clients, has invested in blue-chip stocks with a three- to five-year horizon.
Club Millionaire also saves on costs. It’s one of the few portfolio managers that don’t solicit business through distribution channels. Most of its more than 550 clients—largely non-residents and high-net-worth individuals in more than 23 countries—have come through word of mouth, said Sangani.
Club Millionaire ended September with a 10.8 percent gain as the markets surged after Finance Minister Nirmala Sitharaman cut corporate tax rates. The average return of top 50 portfolio managers tracked by BloombergQuint stood at 5.3 percent during the month—the best since March.
The September rally saw four portfolio managers post double-digit return, and 34 outperformed the Sensex. Only two lost money for investors.
The performance of top 50 portfolio managers in September:
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