Which PMS Categories Beat Their Benchmark in 2026? A Data Review

An investor with Rs 50 lakh or more to place usually starts with a category question. Should the money go to a large cap PMS that behaves like the index with a few active bets, a multi cap PMS that roams across the market, or a small cap PMS that promises more and swings more? The next question is which group has actually delivered against its benchmark, the index a manager is measured against.

That question has no official answer. SEBI does not publish PMS category performance, because SEBI does not recognise "large cap" or "small cap" as PMS categories at all. It recognises four broad strategies; the category labels on comparison sites and monthly leaderboards are added by data providers.

This review counts, for each category label, how many strategies beat their own stated benchmark over one, three and five years, and by how much at the median. We then test how much of the result depends on the benchmark chosen. No strategy or portfolio manager is named or ranked here, and nothing in this article is a recommendation.

Every category figure in this article is computed from the public strategy listing on PMS Sahi Hai, downloaded on 7 October 2026. Each record shows the strategy's category label, its stated benchmark, its trailing returns and the benchmark's trailing returns for the same periods.

The listing held 657 PMS records on the download date. We narrowed them in four steps.

1. We kept the 546 records benchmarked to the S&P BSE 500 TRI or the Nifty 50 TRI. The other 111 use debt, hybrid, multi-asset or other indices and are discussed separately.
2. We kept the 395 records that share one reporting date, which we establish below. The other 151 carry benchmark figures from other month-ends and cannot be compared fairly.
3. We kept the 382 records carrying one of eight category labels: large cap, large & mid cap, multi cap, flexi cap, mid cap, mid & small cap, small cap and thematic. Thirteen records with other or incomplete labels were dropped.
4. For each horizon we used only strategies with both a strategy return and a benchmark return. That leaves 348 strategies at one year, 271 at three years and 193 at five years.

A strategy "beat" its benchmark when its trailing return was higher than the benchmark's trailing return for the same period, by any margin. "Median excess" is the middle value of strategy return minus benchmark return, in percentage points.

The listing does not print a reporting date on each record, so we dated the records from the benchmark figures themselves. In the largest group, the BSE 500 TRI shows a one-month return of -0.1% and the Nifty 50 TRI shows -1.1%. PMS Bazaar's review of August 2026 reports -0.09% and -1.14% for those two indices in that month. A second, smaller group matches July 2026 index returns and was excluded.

We therefore treat the sample as dated 31 August 2026. For that date the listing shows the BSE 500 TRI at 4.7% over one year, 12.1% a year over three years and 10.9% a year over five years. The Nifty 50 TRI shows -0.3%, 9.0% and 8.3%.

We did not adjust for risk, fees or taxes, audit the category labels against portfolios, or add back strategies that have closed. The site states that returns are net of fees where stated.

PMS benchmark reporting in its present form dates from SEBI's circular of 16 December 2022. It kept the "investment approach" as the manager's documented philosophy and added a layer above it called the Strategy. There are four: Equity, Debt, Hybrid and Multi Asset. Each approach must be tagged to one strategy, at the manager's discretion.

The circular then asked the Association of Portfolio Managers in India (APMI) to prescribe a maximum of three benchmarks for each strategy. The manager selects one. Performance must be shown as a time-weighted rate of return alongside the benchmark's trailing return. The framework took effect on 1 April 2023 and now sits in SEBI's Master Circular for Portfolio Managers dated 16 July 2025.

APMI's first list, dated 23 March 2023, named the Nifty 50, the S&P BSE Sensex and the MSEI SX 40 for equity, all as total return indices. By 2026 the equity benchmarks appearing in APMI data are the Nifty 50 TRI, the BSE 500 TRI and the MSEI SX40 TRI. We could not confirm the date of that change from a primary document.

One more development is pending. SEBI's Board approved new Portfolio Managers Regulations on 24 September 2026. We found no Gazette notification as of 7 October 2026, so the 2020 Regulations and the 2025 Master Circular are the rules that apply to the data in this review.

The same 2022 circular says that performance reporting must not mention any categorisation of investment approaches other than the strategy they are tagged to. That is why a factsheet says "Strategy: Equity" and not "small cap".

Mutual funds work differently. Their scheme categories are set by a SEBI circular of October 2017, so a fund carrying a category name operates under regulatory definitions. A PMS described as small cap carries no such obligation. The label on a comparison site reflects how a data provider has classified the approach, usually from its stated objective and holdings.

This has a direct consequence for anyone reading PMS category performance. A small cap PMS and a large cap PMS can sit under the same strategy, Equity, and be measured against the same broad index. Earlier studies show how much that matters. A Business Standard analysis of calendar 2022, using category indices, found that only 27.4% of 212 schemes beat their benchmarks, and small cap was the only group where a majority did. A Moneycontrol analysis of calendar 2024 found that 14 of 22 mid-cap schemes beat the BSE 500 TRI but only 6 beat a mid-cap index.

Each cell shows strategies ahead of their own stated benchmark out of strategies with data, the beat rate, and the median excess return in percentage points.

Source: PMS Sahi Hai strategy listing, downloaded 7 October 2026; records dated 31 August 2026 by benchmark returns; our calculations. Three-year and five-year figures are annualised.

Over one year, every category had a majority ahead of benchmark. The range runs from 63.6% for thematic PMS to 93.3% for mid & small cap. In absolute terms, 56 of 348 strategies failed to beat their benchmark.

The medians are large. Half of all strategies beat their benchmark by more than 7.35 percentage points, and a quarter beat it by more than 14.6 points. The worst result trailed by 8.7 points and the best led by 47.8 points. A spread that wide tells you the benchmark was not a demanding hurdle in this window. The BSE 500 TRI returned 4.7% and the Nifty 50 TRI lost 0.3%.

The number has also moved quickly. PMS Sahi Hai's count for 30 June 2026 found 72.4% of 384 equity strategies ahead over one year. Two months later, on a somewhat different sample, the figure is 83.9%. A one-year beat rate is a reading of a moving market more than a verdict on managers.

The three-year column is the sobering one. The all-category beat rate drops to 69.0% and the median excess shrinks to 2.30 points a year. Among mid cap PMS strategies, 10 of 17 were ahead, and the bottom quarter trailed by more than 3 points a year.

Five-year figures look better again at 73.1%, but read them with the sample in mind. Only 193 of 382 strategies have a five-year record in the listing. Those are, by construction, the survivors.

For context, APMI's own data as of May 2026, reported by Cafemutual, showed 57.6% of 543 discretionary equity schemes ahead of benchmark over five years. Our 73.1% comes from a smaller listed sample at a different date, a reminder that the sample decides the answer.

The multi cap PMS and flexi cap PMS labels together account for 235 of the 382 strategies, so they set the overall result. The two behave almost identically at one and three years: about 83% ahead over one year and about 69% over three. Flexi cap PMS shows a higher five-year median, +4.20 points against +1.95, but only 22 flexi cap strategies have five-year data against 98 for multi cap. Both labels are applied by the data provider, so we would not read a skill difference into that gap.

Inside multi cap PMS the spread is the real story. Over three years the middle half of strategies landed between 0.6 points behind benchmark and 6.1 points ahead, and the extremes ran from 9.4 points behind to 20.6 ahead. Choosing the category tells you little; choosing within it decides the outcome.

Large cap PMS is the category where the benchmark is hardest to beat and the data show it. The one-year beat rate of 81.0% looks healthy, yet the median margin is the second smallest of any category at +4.00 points. Over five years, 9 of 16 strategies were ahead and the median excess was +0.15 points a year.

Seventeen of the 22 large cap strategies use the Nifty 50 TRI, a sensible match for a large cap portfolio and also the easier of the two main benchmarks in this window, a point we quantify below.

The three PMS categories tilted to smaller companies posted the highest beat rates. Mid & small cap led at one year with 42 of 45 strategies ahead. Small cap PMS had the largest median margin, +12.20 points over one year, and all 9 small cap strategies with a five-year record beat their benchmark.

Before treating that as proof of skill, look at what they were measured against. Eighteen of the 21 small cap strategies are benchmarked to the BSE 500 TRI and the other three to the Nifty 50 TRI. Neither is a small cap index. When smaller companies outperform larger ones, a small cap portfolio will beat a broad index whether or not the manager picked well. Finance research calls the long-run tendency of smaller companies to outperform the small firm effect, and it comes with higher volatility and long stretches where it reverses.

It reversed within this very year. PMS Bazaar's July 2026 review had large cap as the best category for the month and small cap as the worst, with 6 of 27 small cap strategies ahead of the BSE 500 TRI. In August 2026 the order flipped and 26 of 28 were ahead.

Mid cap PMS shows why horizon matters. The one-year beat rate is 88.9%. Over three years it is 58.8%, the second lowest in the table, with a median excess of +1.40 points.

Thematic PMS sits at the bottom on every horizon: 63.6% at one year, 50.0% at three, 60.0% at five. The reason is structural. A theme or sector portfolio is tied to the fortunes of that theme, and its benchmark is still a broad market index. In a year when the theme lags, the strategy lags its benchmark. The sample is also thin: 11 strategies at one year and 5 at five.

The listing does not support firm numbers for the remaining groups.

Debt. The listing has 30 debt records across several benchmarks. In the largest group sharing one set of benchmark figures, 9 of 10 strategies were ahead of the CRISIL composite bond index over one year. We could not confirm that group's reporting date from an outside source, so treat it as indicative. For scale, SEBI's report for 31 August 2026 shows Rs 44.35 lakh crore managed by 511 portfolio managers, of which Rs 31.92 lakh crore is provident fund money.

Multi-asset. There are 54 multi-asset records. In the main group, 14 of 19 were ahead over one year, 6 of 11 over three years and 5 of 7 over five years. The APMI multi-asset benchmarks are custom blends of equity, arbitrage, debt and REITs or InvITs, so a strategy holding more equity than the blend will look good in a rising market. The same date caveat applies.

Hybrid. Only one hybrid record had a paired one-year figure, so no rate can be drawn.

Quant. The listing has no quant category. Rule-based and factor strategies appear under multi cap, flexi cap, small cap and multi-asset labels. Picking them out by name would mean building a category by guesswork, so we have not published a quant beat rate.

Within the Equity strategy, a manager selects one benchmark from those APMI prescribes. In our sample 274 strategies chose the BSE 500 TRI and 108 chose the Nifty 50 TRI. Over the year to 31 August 2026 those two indices were 5 percentage points apart: 4.7% against -0.3%. Over three years the gap was about 3 points a year, and over five years about 2.6.

Read the last two rows together. Measured against the index they chose, 70.2% of Nifty 50 TRI strategies were ahead over five years. Measured against the BSE 500 TRI, the same strategies with the same returns come out at 47.4%. Nothing about the portfolios changed. Only the hurdle did.

Both indices are on the prescribed list, and the Nifty 50 TRI suits a portfolio of the largest companies. The problem arises when the benchmark and the portfolio do not match. In the multi cap category, 52 of 156 strategies use the Nifty 50 TRI. All 45 of those with one-year data beat it; 38 would have beaten the BSE 500 TRI.

To see how much of the category ranking survives a common hurdle, we re-tested every strategy against the BSE 500 TRI.

On a common index the all-category beat rate falls by about 5 to 7 points at each horizon, and the ordering becomes a simple size ladder: the smaller the companies a category holds, the more often it beat the broad index. That describes which part of the market led over these five years. It is not evidence that small cap managers are more skilled than large cap managers.

A fair test of a small cap PMS would use a small cap index, and of a mid cap PMS a mid cap index. Those returns are not in the listing for this date. The 2024 Moneycontrol exercise suggests what such a test tends to show: beat rates fall sharply once the yardstick matches the portfolio.

The raw material for all of this is regulatory reporting. Portfolio managers file monthly reports with SEBI and with APMI within seven working days of month-end, and the 2022 circular requires APMI to publish them in a form that makes comparison easy, including each approach's performance relative to others in its strategy.

Commercial data platforms sit on top of that. They collect factsheets and disclosures, apply their own category labels, and publish monthly reviews with category averages. Their labels differ: one platform combines multi cap and flexi cap into one group of about 290 strategies, while the listing used here keeps them apart.

The newest layer is scoring and screening software, including AI tools that read factsheets and answer questions in plain language. These tools typically compute excess return over the stated benchmark across several horizons, add risk measures, and rank strategies within a peer group. A peer group is a category by another name, so a percentile rank inside "small cap" is only as meaningful as the label and the benchmark behind it.

None of these layers adds back strategies that have closed. We found no survivorship-adjusted scorecard for Indian PMS, so any category table, including ours, is a snapshot of survivors.

The category cut does several things a single headline number cannot.

• It replaces one average with eight base rates. "83.9% beat their benchmark" hides a 30-point range between thematic PMS and mid & small cap over one year.
• It gives you a peer median. If a mid cap PMS on your shortlist shows three-year excess of 2 points a year, you can see that the category median was +1.40 and the top quarter started around +3.2.
• It shows how results decay with time. The fall from 83.9% at one year to 69.0% at three is a warning against reading a strong recent year as the norm.
• It makes the benchmark question concrete. Seeing 90.9% turn into 72.7% for the same strategies is more persuasive than any general advice to check the benchmark.
• It is consistent with what factsheets show. The comparison uses each strategy's stated benchmark, which is the comparison SEBI requires managers to present.

It also tells you something about persistence. Of the 193 strategies with all three horizons, 113 beat their benchmark in every one and 16 in none. Among strategies ahead over one year, 128 of 163 were also ahead over five. Among those behind over one year, 13 of 30 were still ahead over five. One weak year is thin grounds for leaving a strategy.

The tables above were built from PMS Sahi Hai's own listing, so it is fair to say what the platform does and does not offer on this subject.

What you can check yourself. The PMS listing can be filtered by category label and by benchmark. Each strategy page shows trailing returns beside the strategy's stated benchmark for periods from one month to five years and since inception, with the difference shown as alpha. That is the same comparison this review counts, one strategy at a time. Set a strategy's three-year and five-year alpha against the category medians above and you know where it sits among its peers.

How Nyra scores it. Nyra is the platform's AI-powered research tool. Its published scoring methodology gives 30% of the Nyra Score to excess return over the stated benchmark across one, three and five years and 15% to consistency. Some of its metrics are scored as percentiles within a peer group defined by asset class and category. A strategy needs at least 12 months of record to be rated. The methodology page describes the score as "not a prediction" and "not a recommendation".

What the platform does not publish. There is no standing category scorecard on the site. The earlier one-year count for June 2026 split results by asset class and benchmark, and this review adds PMS category performance as a one-off calculation. Strategy records do not print a reporting date, which is why we had to infer one. Strategy pages also state that their growth chart, rolling-window and risk figures are modelled to the since-inception return and are illustrative.

The benchmark-choice finding matters for any score built on stated benchmarks. A strategy measured against the Nifty 50 TRI faced a lower hurdle in this window than one measured against the BSE 500 TRI. The site's guide to benchmark selection in PMS covers how to test that fit.

PMS Sahi Hai is an APMI-registered distributor of PMS and AIF products (APRN08358), and its pages state that Nyra is an analytical tool and not a SEBI-registered investment adviser.

The same table can mislead if its weaknesses are ignored.

• Survivorship bias. Strategies that closed, merged or stopped reporting are absent. Survivorship bias, the habit of judging a group by its survivors, inflates beat rates, and the effect grows with the horizon. Of 382 strategies, 189 have no five-year pair in the listing.
• Unregulated labels. PMS categories are a data provider's classification. A strategy labelled mid cap may hold a good share of small caps, and labels differ between platforms.
• Small samples. Five-year rates rest on 9 small cap, 8 large & mid cap and 5 thematic strategies. One strategy changes those percentages by 11 to 20 points.
• One end date. Trailing returns to 31 August 2026 capture one window. The date itself is our inference from benchmark figures, since the listing does not print one.
• No risk adjustment, and not your return. A strategy that beat its benchmark with twice the drawdown counts the same as one that did it smoothly, and these are strategy-level time-weighted returns. Your own return depends on when you invested, your fee plan and taxes.
• Listing coverage. The sample is what one platform lists and displays. It is not the full APMI universe.

Three conclusions hold up after the caveats.

First, most equity PMS strategies that are still reporting did beat their stated benchmark to 31 August 2026, on every horizon and in almost every category. It is also what survivorship and a friendly market for smaller companies would produce.

Second, the ranking of PMS categories mostly reflects company size. Small cap and mid & small cap strategies lead, large cap trails, and the pattern strengthens when every category faces the same index. An investor who picks small cap PMS because "small cap managers beat their benchmark" is really making a bet that smaller companies keep leading.

Third, the benchmark a manager chose moved the five-year beat rate of one group from 47.4% to 70.2%. Before comparing two strategies, check that they are measured against the same index, and ask whether that index resembles the portfolio.

A practical way to use this review:

1. Find the category row for the strategy you are considering and compare its excess return with the category median at three and five years, not one.
2. Note its benchmark. If it uses the Nifty 50 TRI but holds mid and small caps, subtract the index gap before you are impressed.
3. Ask the manager for rolling returns, which show performance across many start dates, and for performance relative to other approaches in the same strategy, which SEBI requires in marketing material.

If you would rather not do the arithmetic by hand, the strategy pages on PMS Sahi Hai show each strategy's alpha against its stated benchmark, and Nyra can be asked how a strategy compares with others carrying the same category label.

Category tables tell you what was typical, which makes it easier to see whether the strategy in front of you is ordinary or exceptional for its group.

Before you sign a PMS agreement, write down three numbers for each strategy on your shortlist: its excess return over three and five years, its category median from the table above, and its excess return against the BSE 500 TRI. If it only looks good on one, you have a question for the manager.

If you already hold a PMS, the portfolio health check on PMS Sahi Hai takes a holdings list and returns a Nyra Score with a rating for each pillar, including returns against a benchmark. To talk through a shortlist, you can book a consultation with the team.

This article is educational and is not investment advice. Past performance does not indicate future results, and investments in securities are subject to market risk. Consult a SEBI-registered adviser before investing.