We all dream of discovering the next HDFC Bank or next TCS or identifying a multi-bagger stock that generates substantial returns over time.
But why? Because Such companies offer a blend of growth potential, market stability, and opportunities for value creation.
Imagine how relieving it would be to invest in a company that has passed that t initial start-up phase and have solid revenue streams, proven business models, and a market presence that provides a level of stability compared to smaller companies.
But, how can we find that “Next Big Thing”?
While finding such opportunities is challenging, thorough research, analysis, and a long-term investment horizon can increase the chances of success.
What if a PMS promises to find you the “Next big thing in the stock market”?The PMS is “Marcellus Rising Giants”
Understanding the “Rising Giants” PMS of Marcellus
Marcellus – How did it begin?
Investment Philosophy of Marcellus
Overview of Marcellus Rising Giants PMS
Fee Structure of Marcellus Rising Giants PMS
Who can invest in Marcellus Rising Giants PMS?
How are the businesses screened? The 5-stage approach of Marcellus!
Marcellus ‘Rising Giants’ Portfolio Returns Vs Benchmark Returns
Marcellus ‘Rising Giants’ PMS Portfolio Vs Nifty Next 50
Marcellus ‘Rising Giants’ PMS vs. Other Actively Managed Funds
How does Marcellus ‘Rising Giants’ PMS compare to Mutual Funds in the tax segment?
Marcellus Rising Giants PMS vs Other Marcellus PMS
Final Verdict on Marcellus Rising Giants PMS
conclusion
This Marcellus PMS “Rising Giants” intends to invest primarily in high-quality mid-sized companies which are less than Rs 75,000 crores market-capitalization, predominantly in the Rs 7,000 crores – 75,000 crores range.
But before reading this review you should be clear about what is a Portfolio Management Scheme.
Let us delve into a comprehensive study of PMS, “Rising Giants”.
By examining its pros and cons and comparing it against relevant market indices, we will assess which option offers superior investment potential.
Also, please read the official brochure(pdf) of Marcellus “Rising Giants” PMS to get a better perspective regarding this review.
Let’s begin!
To help both individual and institutional investors manage their equity portfolios.
Marcellus Investment Managers was founded in 2018 by Saurabh Mukherjea, Rakshit Ranjan, and Vivek Misra, who are well-known figures in the Indian financial industry with extensive experience in fund management and research.
The firm follows a concentrated, long-term, and high-conviction investment approach.
Marcellus’s client base primarily includes high-net-worth individuals, family offices, and institutional investors.
Marcellus aims to identify and invest in quality businesses with sustainable competitive advantages, strong management teams, and attractive growth prospects.
Marcellus focuses on investing in Indian companies across various market capitalizations, with a particular emphasis on mid and small-cap stocks.
| Strategy | Category | Fund Manager | Date of Inception | Age Of PMS | Corpus (in Cr, approx) | Benchmark | Returns SI (CAGR) | Stocks In Portfolio |
| Marcellus Investment Managers Rising Giants | Multi Cap | Ashvin Shetty | 13th Aug 2021 | 1Y 10M | 1200 | BSE 500 TRI | -15.7% | 15-20 |
| Options | Rate |
| Fixed fee | 2%-1.25% p.a. with Zero profit sharing for different slabs from 1Cr-25 Cr |
| Hybrid model | 1.25% -0.5% p.a. fixed fees with 10%-5% profit sharing for different slabs from 1Cr-25 Cr |
| S.No. | Description | PMS with Kotak, ICICI, Axis custody | PMS with HDFC custody | Remarks |
| 1 | Set-up costs (Notary + Stamp duties) | Rs. 1,750 (NIL for STP) | Rs. 1,750 (NIL for STP) | One Time – First Invoice |
| 2 | Brokerage Cost | 10bps + STT + Govt Levies | 10bps + STT + Govt Levies | As transacted on txn value |
| 3 | Custody Charges | 3.0 bps PA | 18.0 bps PA | Quarterly – on average daily AUM |
| 4 | Fund Accounting Charges | 3.0 bps PA | 3.0 bps PA | Quarterly – on average daily AUM |
| 5 | Annual Client CA Certification | Rs 1,000 | Rs 1,000 | Annually-end of the year |
| 6 | Bank Charges | At actuals | At actuals | At actuals |
Even if you fulfill all these criteria, is it still worth your hard-earned money to invest in this PMS? Read to find more!
Let’s now delve into the most important part of how Marcellus filters their stocks from the whole universe.
Stage 1: The universe is scanned and companies only in $500 Mn-10bn Market cap are selected
Stage 2: Forensic Screening.
Marcellus study the companies filtered in stage 1 with further credential checks for accounting and governance. Around 40% of companies drop out from the universe in this filter
Stage 3: Fundamental Checks
Using defined thresholds on revenue growth, margin improvement working capital, asset turns, RoCE, and cash generation to identify companies that are scaling rapidly and sustainably. 50 % of companies fail here and are dropped.
Stage 4:
To further support their argument regarding the chosen stocks, Marcellus then does a thorough review of annual reports, conference calls, management interviews, and other published materials. Only the top 10% of companies are subjected to these checks.
Stage 5:
In the final stage, Marcellus looks for 3rd party checks in addition to the company-provided information.
Marcellus does not solely rely on company-provided information. They conduct independent research with the help of information from industry experts, suppliers, customers, competitors, and other sources.
In this way, they gain a more comprehensive understanding of the company’s operations, market position, and management quality
Finally ~15 stocks are selected from the whole universe of more than 450+ companies.
The Rising Giants portfolio has given us utter negative returns over several months and the overall returns since inception is down by about 15%.
| Trailing Returns (%) | 1m | 3m | 6m | 1y | 2y | 3y | 5y | 10y | Since inception |
| Rising Giants PMS | 4.70% | 3.50% | -6.20% | -2.80% | – | – | – | – | -15.70% |
Now let’s compare and see how Rising Giants portfolio has performed with its benchmark index.
The comparison of the PMS returns as of May 31, 2023, is shown below.
This PMS can’t even surpass the benchmark returns! Do you still think this Marcellus ‘Rising Giants’ PMS can find you the ‘Next Big Thing’ in the market?
Ok, the Rising Giants portfolio didn’t beat its benchmark index. But how did it fare against its fair comparison index, the Nifty Next 50? Now let’s go a step further and do a comparison with the Nifty Next 50 over the same period and see if we were able to beat it.
As we see above, the Rising Giants have underperformed the Next 50 by quite a big margin.
But, what is the reason for this underperformance?
Marcellus Rising Giants PMS is believed to have purchased these companies at a very high price at the time of covid. Now, after a state of normality post covid, the stocks are undergoing a period of consolidation. This is said to be the reason for diminished returns!
Moreover, when we compare the returns of the Rising Giants PMS with actively managed Midcap Mutual funds over one year, we observe a significant difference or gap.
The previously mentioned returns are pre-tax returns, and considering the impact of capital gains tax, the actual return would be lower, resulting in a different post-tax return value.
In comparison to mutual funds, Portfolio Management Services (PMS) are typically less tax-efficient, which could result in a larger tax burden.
Mutual fund investors may enjoy tax benefits not accessible in PMS, so investors should consider tax implications when evaluating PMS returns.
“Marcellus Kings of Capital” is based on the banking sector while “Marcellus Rising Giants PMS” is based on finding the ‘next big thing’ in the market. Both these PMS differ in their basic themes.
Marcellus Kings of Capital PMS: An In-Depth Analysis! Is It Worth Investing?
‘Marcellus Consistent Compounders Portfolio’ predominantly focuses on Large Cap funds while ‘Marcellus Rising Giants PMS’ invests in high-quality mid-sized companies
Marcellus Consistent Compounders Portfolio: PMS Review- Should you Invest?
Even though the investment amount is the same in both the PMS (Rs 50 lakhs)
while the fixed fee of ‘Marcellus Rising Giants PMS’ is 2%-1.25% p.a. (with Zero profit sharing for different slabs from 1Cr-25 Cr) with an additional hybrid model.
‘Marcellus Little Champs PMS’ Fixed fee is 1% (quarterly) with a variable option.
Marcellus Little Champs PMS: Should You Consider Investing? An In-Depth Review
While a one-year performance review of a Portfolio Management Service (PMS) may not provide a comprehensive view, it is currently not advisable to consider the Marcellus Rising Giants PMS.
We have solid reasons for this, they are
Considering the underperformance and liquidity concerns associated with PMS, it might be prudent to explore alternative options such as lower-cost thematic funds, especially if you have a specific preference for a portfolio focused on a particular theme or sector.
So, in conclusion, if you are seeking to diversify beyond mutual funds and pursue aggressive returns, it is advisable to look away from Marcellus Rising Giants PMS and explore alternative options such as more consistent-performing PMS or thematic funds.
There are many reviews on social media sites like Quora, Facebook, Twitter, etc, that have exaggerated opinions on this Marcellus Rising Giants PMS.
Please don’t fall for amateur advice and lose your hard-earned money. Consult a professional financial planner to avoid pitfalls in your investment journey!
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