Mid and smallcap stock picker Porinju Veliyath’s PMS firm Equity Intelligence has finally given investors a reason to smile. In September, in step with buoyant markets, Equity Intelligence PMS investors gained 5.6% — the best monthly return in the ongoing financial year (FY20). It is a good 200 basis points more than the benchmark indices, giving Veliyath a relief, whose PMS had in recent months seen sharp correction.
Performance of Equity Intelligence Pvt. Ltd. as portfolio manager on month-end (on weighted average basis for all clients) in September 2019 was up 5.6% for assets managed worth Rs 894 crore.
Till second half of calendar year 2017, PMS investors made sizeable gains each month. This helped Equity Intelligence PMS assets grow more than double between January 2017 to January 2018.
The mood was spoilt from January 2018 onwards when Long Term Capital Gain tax was reintroduced. As markets faced correction, the high risk mid and small cap stocks fell like ninepins. This was greatly affected Equity Intelligence PMS portfolio.
In the 21 months between January 2017 and September 2019, Porjinu’s PMS investors faced monthly losses in 14 out of 21 instances. That tells you a sordid tale. In some months, it was complete bloodbath. In July 2019, the PMS portfolio manager performance slipped 13.20%. In September 2018, loss were 20.30%. In March, May and June of that year, PMS monthly losses regularly hit 11-12%.
In this financial year, Equity Intelligence PMS delivered positive returns twice i.e. May (up 2.81%) and September. In March 2018, the PMS portfolio return had hit a near-time high of 8.71%. In August 2019, losses were at 2.69%.
In September 2019, which saw mid and small cap stocks rise on the back of corporate tax cut euphoria, pushed up the performance of Equity Intelligence. Porinju has always said that most of the stocks in Equity Intelligence portfolio are fundamentally strong and some of them are industry leaders with the potential to create wealth.
Take a look below at Equity Intelligence performance in the last 12 months.
Porinju’s support for the ruling regime’s policies is well-known. However, they have not always given great RoI. Plus, large investments in illiquid stocks have hurt investments in the past when Porinju misread the investment story or inaccurately assessed promoter/management quality.
Most chors never transform!
Trust me, I have burned my fingers than anyone else betting on #ChangingIndia theme🙂
They will perish in the ongoing “Historic Detoxification Drive” of Corporate India. Only companies with Integrity – small or large would survive & emerge as winners.
— Porinju Veliyath (@porinju) October 5, 2019
Porinju said this on Twitter, striking the usual pro-government stance that has often made him a darling of pro-government investors.
However, after July 2019 main Budget, Porinju was upset with “market unfriendly provisions” that he claimed had usurped the positives from the continuity of government post Lok Sabha elections.