Most portfolio management service providers have reported negative returns over the past year, despite demonstrating stronger performance over the three- and five-year periods. Notably, the ICICI Prudential PMS Contra Strategy and the ASK India Entrepreneurs portfolio, with assets under management (AUM) of ₹12,110 crore and ₹10,484 crore, respectively, have registered absolute negative returns of 3 percent and 9 percent for the year ending September.
In contrast, these funds, which employ multi- and flexi-cap strategies, have achieved compounded annual growth rates (CAGR) of 28 percent and 14 percent over the five-year timeframe, according to data from PMSBazar. Similarly, White Oak Capital Management’s India Pioneers Equity and ValueQuest Platinum Scheme have faced negative returns of 5 percent and 13 percent over the last year, but over five years, they have yielded returns of 16 percent and 19 percent, respectively. Marcellus Investment Managers’ Consistent Compounders large-cap strategy posted an 11 percent loss over one year against a positive CAGR of 13 percent over five years.
In the small-cap segment, the Aequitas Investment India Opportunities Product, with AUM of ₹3,826 crore, delivered returns of 25 percent and 32 percent over three- and five-year periods, respectively.
George Heber Joseph, Chief Investment Officer and CEO of ASK Investment Managers, emphasized that the firm remains committed to generating superior returns through disciplined bottom-up stock selection, although short-term uncertainties related to global interest rates, elections, and geopolitical issues persist. He noted that the recent underperformance can be traced to a sharp rally in lower-quality, high-beta, and momentum-driven sectors, which the firm deliberately avoids due to its focus on business quality and earnings durability. Joseph also mentioned a temporary valuation compression in high-quality stocks, especially in the consumer and financial sectors, partly due to sustained foreign institutional investor (FII) selling.
Prabhakar Kudva, Director and Principal Officer of Samvitti Capital’s Portfolio Management Service, expressed optimism that the coming year will be significantly better than the last, as several global issues—such as tariffs, trade agreements, and conflicts—are nearing resolution. He noted that India has been among the poorest-performing markets globally over the past year and suggested that the current environment is conducive to a cyclical rebound. Typically, portfolio management services outperform mutual funds during bull markets and underperform during bearish phases, given their more aggressive portfolio construction with a higher proportion of small and mid-cap stocks compared to mutual funds, Kudva explained.
Furthermore, Kudva remarked on the emergence of specialized investment funds within mutual funds, which include a portion of the portfolio hedged using derivatives, making them less susceptible to losses in bear markets. However, he does not view these funds as competition to portfolio management services in their current structure.
Published on November 1, 2025.
