Less Understood or Misunderstood ?

Dear Investors,
Many of you have heard about Portfolio management services (PMS), but do we really understand how it works? Is PMS better way of investing? Let's bust all the myths around it's and get into the reality.

Is PMS for me ?

Yes, if you are looking to manage your investment portfolio through professionally experienced investment managers then PMS(Portfolio Management Services) is exactly for you.
The Investment solutions provided by PMS cater to a niche segment of clients with minimum investments of 25 lakh rupees cash or a stock or can be a combination of cash and stocks. An investor in PMS will own individual securities unlike a mutual fund investor, who owns units of the scheme or a fund.
There are two types of PMS, discretionary and non-discretionary. However, majority of the asset management companies offer only discretionary PMS plan.

Discretionary PMS: Investment at Fund Manager's choice

In discretionary PMS, the choice as well as the timings of investment rest solely with the Fund Manager. The discretionary portfolio manager manages the funds of each investor independently and investments are made at the fund manager's discretion and not on investor's discretion. So, the quality of investment is left to the knowledge levels, capability in analyzing the market and analysing the value risk of the Fund manager. It is like ordering a dish from the menu of a restaurant.

Non-Discretionary PMS: Investment at your choice

In non-discretionary PMS, the fund manager will only suggest the investment ideas. The decision on timings and choice of the investment rests solely with the investor. However, the execution of trade is done by the fund manager. It is like ordering your favorite pizza. You select the base, toppings, extra cheese and so on. The result is the exact output of your choice.

Why you need PMS ?

Professional and Proactive Fund Management

Portfolio Management Service has qualified and experienced portfolio managers backed by a strong research team managing portfolios on behalf of clients instead of the clients managing it themselves. We prevent you from being constantly worried about your investments. Our services will help you make your daily life less complicated and investments more productive through less effort.

Customized Investment Plan

Portfolio Management Services provide investor specific professional services to meet the objectives of various investors . Portfolio manager builds and manages each portfolio with investor's choice of strategy and timing of the investment kept in mind. Our customized services enable us to meet your demands and expectations more efficiently and effectively.

Utmost Transparency

PMS's level of transparency is the most important virtue. PMS offers complete transparency in managing investors money. PMS's investors will directly own the portfolio stocks in their DP. Investors will know every purchase and sale of shares, brokerage, STT and other charges paid, date of each transactions and portfolio managers exact fee. Investor can view their portfolio and transaction 24/7 online.

Superior Returns

PMS can be more aggressive and has the potential to generate the best returns. Portfolio managers may choose to have meaningful exposure to high conviction companies and hold on as long as they are delivering growth by adding value and superior returns.

What is the fees structure in PMS ?

Setup Fees/Upfront Fee :

Upto 2% will be charged as setup fees or upfront fee. This is one time fee is applicable for first year payable upfront for the initial setting up of the portfolio.

Fixed Fees :

Majority of the PMS strategies are charged at 2.5% per annum, charged on the average value of portfolio in monthly or quarterly basis. In such fixed fees structure there will be no profit sharing.

Variable Fee :

In variable Model, Fixed fees will get reduced significantly from 2.5% to 1 .5% or 1%, however profit sharing will go up to 20% over and above performance of hurdle rate.

PMS as a product construct is concentrated portfolio where the number of stocks will be between 10 and 25. Unlike mutual fund which has widely diversified portfolio with more than 50 stocks. As product structure PMS has potential to deliver superior return.

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