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Portfolio Managers Beat Benchmarks In First Half As Virus Ravaged Stocks

How did portfolio managers perform in the pandemic quarter.

A television screen displays a news report about the coronavirus outbreak as a trader monitors financial data on computer screens on a trading floor. (Photographer: Chris J. Ratcliffe/Bloomberg)
A television screen displays a news report about the coronavirus outbreak as a trader monitors financial data on computer screens on a trading floor. (Photographer: Chris J. Ratcliffe/Bloomberg)

India’s top portfolio managers returned best quarterly gains at least since 2018 as stocks recovered from the March selloff, the worst in more than a decade, triggered by the Covid-19 pandemic.

While monthly returns remained volatile over four months amid uncertainty, April and June showed recovery, according to data released by the market regulator after four months since deadlines for disclosures were extended. Portfolio managers outperformed the benchmark in five of the last six months. They lost 8.8% on an average against more than 15% drop in Sensex and Nifty 50 in the first half of the year.

For the quarter ended June, top 59 portfolio management firms returned average gains of 18.1%, the best since BloombergQuint started tracking the data two years ago. The Sensex rose 18.5% and Nifty 50 jumped 19.8% during the quarter.

It’s a rebound from the fiscal ended March that saw equity returns tumble as Indian markets plunged, tracking the global selloff in March after the new coronavirus stalled trade and economic activity. The benchmark Sensex and Nifty indices closed 23.8% and 26.10% lower, respectively, for the fiscal. Portfolio managers on an average lost 20.10% in that time.

The key benchmark indices bottomed out in March and have since surged nearly 50%.

That came as liquidity pushed equity valuations higher even as the country remained under the lockdown.

India’s top 59 portfolio managers—who collectively manage over Rs 1.1 lakh crore of investor money or 75% of the total money managed by portfolio managers—returned on an average 7.9% gains in June, aided by the broader market recovery.

Of the 59 tracked by BloombergQuint, 21 outperformed the benchmark S&P BSE Sensex in June.

Karma Capital, a portfolio manager that largely manages foreign portfolio investor money, returned 56.3% in the quarter ended June. This came after the firm, managed by Nandita Agarwal Parker and Douglas Parker, suffered losses in FY20.

Karma Capital, a dollar-based investment fund, invests in small- and mid-cap companies.

In comparison, the NSE Midcap 100 index rose 25.6% while the broader market Nifty 500 rose 21.1% in the April- June quarter.

Here is a snapshot of how the portfolio managers performed.