At a time when large and popular equity Portfolio Management Services (PMS) schemes have eroded their clients’ wealth by up to 10% just in May, 2020 data from PMS Bazaar, a portal that informs on PMS comparison, show that schemes that had a multi-asset allocation approach managed to provide comparatively better returns, though in the negative.
According to Prabhudas Lilladhar (PL) officials, their PMS team timely reduced its equity allocation to below 50% of the portfolio, thus drastically cutting down their exposure into the equity markets.
“This strategy has not only protected clients’ wealth but also outperformed marquee portfolio managers on the street,” said Siddharth Vora, Head of Quant Investment Strategies & Fund Manager at Prabhudas Lilladhar.
“The bold decision to start trimming down on equities had started as early as January. The portfolio also increased its allocation to gold and increased cash positions. This move was triggered by their proprietary quant meters which timely indicated a sharp cut in equities due to weakening global macros signals,” he added.
In rising markets, every investor tends to increase their investments in equities led by their feeling of fear of missing out when they see the euphoria in the markets, but capital preservation was the key in turbulent times and can be achieved only with the right asset allocation and eliminating all human emotions that go into decision making, he added.
