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India’s Top Portfolio Managers Fail To Recover From The Worst In 2018

Portfolio managers failed to recover from the rout in mid-cap stocks and the liquidity crisis for non-bank lenders in 2018 even as the nation’s two benchmark indices managed to end higher.

Fifty portfolio managers with equity assets worth Rs 1,03,253 crore ($14.75 billion)—more than 88 percent of the money managed by the category—lost 6.7 percent on an average in the just-concluded year, according to data compiled by BloombergQuint from disclosures to the market regulator. That compares with 5.9 percent and 3.2 percent gains in the Sensex and the Nifty 50, respectively, during the period.

The average portfolio returns for the 50 such firms—managing more than Rs 1 lakh crore in equities for more than 1.3 lakh high and ultra-high net worth investors—fell 5.3 percent on an average in the first half of the calendar year on account of the mid-cap carnage.

The mid-cap slump wiped off the portfolio gains of some of the managers by as much as 40 percent. The Nifty Midcap 100 Index returned a negative 13.9 percent in the first half and ended the year with a negative 15.4 percent.

Concerns around non-banking financial companies after the defaults by IL&FS Ltd. only aggravated the selloff in the second half of the year. The average portfolio returns for the 50 firm fell 1.8 percent in the second half of the year. It, however, remained positive in the last quarter of 2018 despite the IL&FS crisis.

The Nifty Midcap Index gave marginally negative returns during the second half. The year would have been even worse had the gauge not returned 4.2 percent gains in October-December, outperforming the Sensex, the Nifty 50 and the broader Nifty CNX 500 during the period.

How Portfolio Managers Fared

Money managed by the top 10 portfolio managers by assets declined 7 percent, or by Rs 5,619 crore, in 2018. They returned a negative 11 percent on an average. Barring Quantum Advisors, which largely manages corporate foreign investor money, all other managers ended with losses.

Best And Worst Performers

Only 14 of the top 50 ended with gains in 2018. Most of the best performers were small portfolio managers with asset size less than Rs 500 crore. The top 10 saw their portfolio gain 10.9 percent in 2018. Clubmillionaire Financial Services led the pack with a return of 21.2 percent.

On the other hand, Equity Intelligence and Kotak Mahindra Asset Management, among others, returned a negative 43.9 percent and 26.1 percent, respectively, in the last calendar year. The assets under management of the worst performing 10 portfolio managers dropped by Rs 4,618 crore in 2018.

Performance Of Top 50 Portfolio Managers