PMS Performance Trends 2024–25: What the Data Shows

A Look at How Portfolio Management Services Have Performed and What It Means for Investors

As HNIs increasingly seek more personalized and performance-driven investment avenues, Portfolio Management Services (PMS) have grown in both size and sophistication. With market volatility, sectoral shifts, and evolving macro trends shaping equity performance, it’s important to assess how PMS strategies have actually delivered—especially compared to traditional vehicles like mutual funds.

This article breaks down PMS performance trends in FY 2024–25, what’s driving returns, and what investors should take away.

PMS Industry Snapshot: Where We Stand in 2025

• As of early 2025, there are over 400+ registered PMS providers in India, managing ₹5.5+ lakh crore in assets

• Sectors driving PMS alpha: manufacturing, PSU banks, capex beneficiaries, mid-cap pharma, energy

• PMS strategies have seen inflows rise 30% YoY in FY24 as HNIs diversify from mutual funds and direct equities

PMS Performance vs Benchmarks

According to data from SEBI and PMS aggregators:

Strategy Type	1-Year Returns (FY24–25)	3-Year CAGR
Multicap PMS	27%	21%
Midcap PMS	32%	24%
Large Cap PMS	18%	15%
Thematic (PSU/Infra)	40–45%	26%+

Compare this with:

• Nifty 50 TRI: ~21% (1-year return)

• Nifty Midcap 150 TRI: ~36% (1-year return)

👉 Over 65% of PMS strategies outperformed their benchmark indices in FY24, especially those with concentrated exposure to midcaps and cyclical themes.

Key Trends Driving PMS Returns

1. Focused Portfolios Outperforming

Most high-performing PMS providers maintained 20–25 stock portfolios, allowing higher conviction and better tracking of emerging trends.

2. Bottom-Up Stock Picking

Unlike index-heavy mutual funds, successful PMS managers used a fundamental, bottom-up approach—focusing on company-level drivers instead of sector bets alone.

3. Higher Allocation to Mid & Small Caps

PMS strategies with >40% allocation to mid and small caps gained handsomely from the broad-based market rally post-2023.

4. Cyclical Sector Exposure

PMS strategies betting early on defence, manufacturing, and infra themes generated excess alpha over standard diversified equity funds.

Volatility Remains a Factor

Despite outperformance, PMS strategies also showed higher short-term volatility compared to mutual funds due to concentrated holdings.

• 3-month drawdowns in some high-beta strategies ranged between 8-12%

• High conviction also means higher exposure to downside if themes reverse

This makes risk-adjusted return an equally important measure-not just raw returns.

Fees & Hurdles: Impact on Net Returns

• Most PMS providers charge a fixed fee (1-2%) and/or performance fee beyond a hurdle rate (typically 10-12%)

• In FY24, some strategies with gross returns of ~30% delivered net returns of 24-26% after fees and taxes

Always compare post-fee returns when evaluating PMS managers.

How Xylem Investments Positioned for FY26 and Beyond

At Xylem Investments, our Xylem Maverick Strategy continues to focus on:

• High-quality businesses with earnings resilience and scalable growth

• Reasonable valuations, avoiding euphoric themes and momentum traps

• A low-churn approach to minimize taxes and transaction costs

• Consistent outperformance with capital protection, not just raw alpha

We believe in real, risk-adjusted compounding-not just chasing short-term spikes.

Final Thoughts: What Investors Should Do

• Review your PMS provider’s performance net of fees and taxes

• Compare across timeframes (1Y, 3Y CAGR, drawdowns)

• Focus on consistency, downside protection, and transparency

• Evaluate whether your PMS strategy aligns with your risk profile and financial goals

👉 Book a portfolio review with our team to understand whether your PMS strategy is working hard enough for you.