Explore Portfolio Management Services

Portfolio Management Services (PMS) involve professional management of investment portfolios on behalf of clients. PMS providers, experienced fund managers, devise investment strategies based on client goals, risk appetite, and investment horizon. They actively monitor and make investment decisions, aiming to maximize returns and manage risk through diversification and asset allocation. Clients' funds are invested in a diverse range of assets such as stocks, bonds, and mutual funds as per strategy chosen by them.

There are primarily two types of Portfolio Management Services: Discretionary PMS and Non-Discretionary PMS. In discretionary PMS, fund managers have full authority to make investment decisions on behalf of the client, considering individual goals, risk tolerance, and liquidity requirements. In non-discretionary PMS, the client provides inputs for investment decisions, and the fund manager executes those decisions.

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The minimum investment required for PMS varies from provider to provider. It can range from Rs. 50 lakhs to Rs. 1 crore or more, depending on the PMS provider and their offering.

PMS fees and charges comprise management fees and performance fees. Management fees are charged as a percentage of the portfolio value and are usually around 1-2% annually. Performance fees are charged as a percentage of the profits generated by the PMS, typically around 10-20% of the profits earned above a predetermined hurdle rate. Apart from management and performance fee, there are various other expenses charged to clients. It's pertinent for investors to review the fee structure and understand any exit charges associated with early exits.

PMS providers customize portfolios based on individual goals, risk tolerance, investment horizon, and liquidity requirements. They conduct detailed discussions with clients to understand their financial objectives, timeframes, income needs, and risk appetite. Based on these factors, the PMS provider designs a unique investment strategy to align with the client's goals, utilizing diversification and asset allocation techniques to manage market volatility and risk.

PMS providers employ risk management techniques such as diversification, asset allocation etc. to manage risk. By distributing investments across different asset classes, sectors, and securities, they aim to reduce the impact of market volatility. Regular monitoring, prompt decision-making, and adherence to a well-defined investment strategy also contribute to risk management. It's important for investors to review the PMS provider's performance track record and consistency in managing risk.

PMS providers often provide their historical performance track records to showcase their investment expertise. These records typically include returns generated over different time horizons and comparisons with benchmark indices. It's essential for investors to assess the track record and evaluate the consistency of performance before making investment decisions, considering factors such as historical performance, benchmark outperformance, and risk-adjusted returns.

Yes, PMS can generally be liquidated or exited before the tenure. However, early exits may incur exit charges, which vary between PMS providers. It's crucial to review the terms and conditions specified in the agreement to understand the exit process, and associated exit charges. Investors should consider these factors when deciding to liquidate or exit a PMS.

Taxes in PMS are handled as per the income tax regulations of the country. Investment gains are subject to tax based on factors such as the duration of investment and the type of securities in the portfolio. PMS providers usually provide investors with necessary tax-related documents, such as transaction statements and capital gains statements, which can be utilized for tax filing purposes. It's important for investors to consult a tax advisor or professional for guidance on tax implications specific to their individual circumstances.