Portfolio Management Service (PMS)

Portfolio Management Services (PMS) has emerged as a sophisticated investment vehicle in India, catering to high-net-worth individuals (HNIs) seeking tailored investment solutions. PMS offers a bespoke approach to wealth management, where portfolios can be customised to meet specific financial objectives, risk tolerance, and investment horizons of the investor.

In India, PMS investment solutions are offered by SEBI-registered portfolio managers, and PMS is regarded as an HNI product as the minimum investment amount required is Rs. 50 Lakh. PMS strategies can provide more personalised management of investments in equities, fixed income, and other securities, unlike mutual funds, which invest in a diversified portfolio that is common to all investors. The essence of PMS lies in its ability to offer increased flexibility and individualised strategies managed by experienced portfolio managers.

Options Available

• Discretionary PMS +

  In this type, the portfolio manager takes full control of the investment decisions on behalf of the client. The manager's expertise is relied upon to select and manage the securities to meet the predefined investment objectives.

• Non-Discretionary PMS +

  Here, the portfolio manager acts as an advisor, providing recommendations and strategies, but the final investment decisions rest with the investor. This option offers greater control to the investor over their portfolio.

• Advisory PMS +

  In this model, the portfolio manager offers tailored advice based on the client’s financial goals and market conditions, but the client executes trades.

Why Invest in PMS?

• Customisation: PMS allows for personalised investment strategies or portfolios crafted based on the investor’s needs and preferences.
• Professional Management: PMS provides access to professional portfolio managers with extensive experience and expertise in the financial markets with access to research capabilities to optimise the portfolio’s performance.
• Transparency: Investors receive detailed reports on their portfolio’s performance, transactions, holdings, and other reports, helping the investor make informed decisions.
• Flexibility: Unlike mutual funds, PMS offers greater flexibility in terms of asset allocation, investment choices and decision-making to respond to market changes and opportunities.
• Potential for Higher Returns: Given the active management approach and flexibility, PMS can potentially deliver higher returns.

Who should consider investing in PMS?

• High-Net-Worth Individuals (HNIs): PMS is ideal for investors with substantial investable assets seeking a personalised portfolio management approach as the minimum investment threshold is high.
• Sophisticated Investors: Those who have a deeper understanding of the financial markets and prefer a tailored investment strategy over a standardised one can look at adding PMS to their portfolio.
• Long-Term Investors: PMS is well-suited for individuals with a long-term investment horizon, as most of the strategies are designed to achieve growth.
• Diversification: PMS can offer further diversification to HNI investors who already have a large portfolio.