Bull Vs Bear Market Performance
Published 2026-03-10. Last updated 2026-04-17. Editorial review: Know Your PMS editorial standards. By Abhimanyu Kucheria for Know Your PMS.
Topic cluster: Risk & Return Metrics
Headline CAGR hides the journey. This cluster explains drawdowns, volatility, rolling returns, capture ratios, and risk-adjusted measures — with Indian PMS factsheet context.
Pillar guide: Max Drawdown Explained
More in this cluster:
- Max Drawdown Explained
- Volatility Explained
- Rolling Returns Guide
- Calmar Ratio Guide
- Information Ratio Guide
What it means (plain English)
Indian equities move in cycles: 2017, 2021, and parts of 2023–24 rewarded aggression; 2018, 2020 (March), and 2022 punished it. Bull vs bear market performance splits a PMS track record by regime—how much of the rally it captured and how much pain it took in drawdowns.
Up-capture measures participation in benchmark gains; down-capture measures participation in losses. A scheme with 110% up-capture and 80% down-capture is the classic asymmetric profile HNIs want—but rare to sustain at scale.
SEBI PMS factsheets usually show calendar returns, not labeled bull/bear tables. You can approximate by tagging months where Nifty TR was above or below zero, or by studying known stress windows (demonetization aftermath, COVID crash, Adani episode ripples, small-cap unwind 2024). Managers who outperform only in bull phases often show negative alpha in bear months.
For ₹1 crore+ allocations, insist on full-cycle evidence. A PMS that doubled in 2020–21 but gave back 40% in 2022 may still work if your horizon is long—but only if you can stomach the bear leg without redeeming at the bottom.
Worked example (Indian PMS scenario)
Split a 60-month window (Apr 2020–Mar 2025) into bull months (Nifty up) and bear months (Nifty down). PMS X: +28% average in bull months, −4% in bear months. PMS Y: +18% in bull, −1% in bear. Headline CAGR may favour X, but Y delivered a smoother path—critical if you fund ₹75 lakh of annual expenses from the portfolio.
Up-capture and down-capture make this concrete. X captures 130% of bull rallies and 110% of bear declines (bad). Y captures 95% of bulls and 45% of bears (good). In the Mar 2020 crash month, on ₹1 crore, X lost ₹11 lakh while Y lost ₹4.5 lakh.
Match the profile to your horizon. A 45-year-old with 15-year runway may accept X; a retiree drawing 5% annually needs Y's bear-market behaviour even at lower bull participation.
Why it matters for PMS scheme selection
Bull-market heroes often disappoint in corrections; regime split reveals whether a PMS matches your drawdown tolerance.
See the complete PMS evaluation framework
- Shows true asymmetry beyond headline CAGR
- Prevents surprise drawdowns in the next Nifty correction
- Helps conservative HNIs avoid high-beta disguised as alpha
- Supports pairing aggressive PMS with stabilizers elsewhere
- Validates marketing claims of 'downside protection'
How to interpret it (practical checklist)
- Calculate or request up/down capture vs stated benchmark
- Review returns for Nifty -10% months individually
- Compare 2022 and 2020 drawdown depth vs peers
- Check if bear performance relied on cash or derivatives
- Read manager commentary from prior bear phases
- Assess whether style (growth/value) fits next regime guess
- Stress-test portfolio with worst bear year from track record
Explore related metrics · Compare PMS schemes · Cagr
Common pitfalls (how this gets misused)
Read our methodology for assumptions and limitations.
- Selecting on bull-window CAGR only (e.g., last 3 years)
- Assuming one crash proves future protection
- Ignoring recovery time after bear losses
- Comparing bear stats without matching benchmark
- Overweighting COVID as sole stress test
- Forgetting redemption pressure hurts small-cap PMS most
Related metrics to review together
Use this guide alongside these metrics to avoid one-number decision-making:
Related guides
- Fees Fixed Vs Performance
- Backtest Vs Live Performance
- PMS Sharpe Vs Sortino
- Performance Persistence Myth
- Max Drawdown Explained
See also
- Capture ratios guide
- Downside protection in crashes
- Beta-adjusted returns
- PMS for conservative investors
FAQs
What down-capture is acceptable for an aggressive PMS?
Depends on mandate. Aggressive mid/small-cap PMS may still show 100–120% down-capture in crashes—you are paying for upside. The question is whether up-capture over full cycles justifies it. Conservative mandates should aim for clearly lower down-capture than Nifty, verified across multiple selloffs.
How do I get bull/bear stats if the factsheet omits them?
Use monthly NAV or performance data vs Nifty TRI on Know Your PMS or from the manager. Tag positive/negative index months. Alternatively use capture ratio metrics if published. DIY regime splits take time but beat guessing from one CAGR number.
Did 2023–24 small-cap rally distort bull/bear views?
Yes. Schemes loaded in small caps looked brilliant in that bull leg but faced sharp 2024 corrections. Extend your window to include at least one liquidity stress period before concluding downside is 'managed'.
Next: How to compare PMS schemes · Compare schemes · All guides
Frequently asked questions
- What down-capture is acceptable for an aggressive PMS?
- Depends on mandate. Aggressive mid/small-cap PMS may still show 100–120% down-capture in crashes—you are paying for upside. The question is whether up-capture over full cycles justifies it. Conservative mandates should aim for clearly lower down-capture than Nifty, verified across multiple selloffs.
- How do I get bull/bear stats if the factsheet omits them?
- Use monthly NAV or performance data vs Nifty TRI on Know Your PMS or from the manager. Tag positive/negative index months. Alternatively use capture ratio metrics if published. DIY regime splits take time but beat guessing from one CAGR number.
- Did 2023–24 small-cap rally distort bull/bear views?
- Yes. Schemes loaded in small caps looked brilliant in that bull leg but faced sharp 2024 corrections. Extend your window to include at least one liquidity stress period before concluding downside is 'managed'.