Portfolio management is a well-planned investing strategy based on an investor’s objectives and risk tolerance. Portfolio management entails selecting and monitoring investments such as stocks, bonds, and mutual funds.
The primary goal of portfolio management is to invest in a way that allows maximizing returns while minimizing risks to achieve financial objectives.
Portfolio management can be done with the assistance of a professional, on your own, or through an automated service.
Types of Portfolio Management Services
- Active Portfolio Management:
Active portfolio management aims at generating higher returns than a benchmark index like Nifty50 or BSE Sensex. This is achieved by actively trading securities based on market conditions. Active PMS is suitable for investors who have higher risk tolerance levels and seek higher capital gains. - Passive Portfolio Management:
Passive portfolio management involves mimicking the performance of a market index such as the Nifty50 by tracking and replicating the index portfolio. This is suitable for investors who want to invest in line with the market trend and have lower risk tolerance levels. - Discretionary PMS:
Discretionary PMS is a type of portfolio management where the portfolio manager has full authority to make investment decisions on behalf of the investor without requiring prior approval for each transaction. The portfolio manager has the flexibility to actively manage the portfolio based on market conditions, investment strategy, and investors’ objectives. They can make buy/sell decisions, allocate assets, and adjust the portfolio holdings as needed. Discretionary PMS is suitable for those who prefer a hands-off approach and trust the expertise of the portfolio manager. - Non-Discretionary PMS:
Non-Discretionary PMS, also known as advisory PMS, involves the portfolio manager providing investment advice to the investor but the final decision-making authority rests with the investor. The portfolio manager offers recommendations, insights, and research-based guidance to the investor, who makes the ultimate investment decisions. The portfolio manager executes transactions only after receiving approval from the investor. Non-Discretionary PMS is suitable for those who want to retain control over their investment decisions. At the same time, benefiting from the expertise and guidance of a professional portfolio manager.
It’s important to note that within these broad types, PMS providers may offer variations or hybrid models to suit different investor preferences. Some providers may offer thematic PMS, where investments are focused on specific sectors, themes, or strategies. Others may specialize in value-based investing.
Features of Portfolio Management Services
- Customization:
PMS offers tailored investment strategies that align with the investor’s financial goals, risk appetite, and preferences. This personalized approach helps in achieving specific investment objectives. - Diversification:
PMS emphasizes diversifying investments across different asset classes (equities, bonds, mutual funds, etc.), sectors, and geographical regions. Diversification helps reduce the impact of market volatility and minimize the risk associated with concentrated holdings. - Portfolio Management:
Portfolio managers actively monitor the financial markets, analyze investment opportunities, and make timely buy/sell decisions. This proactive approach aims to maximize returns and manage risks effectively. - Research and Expertise:
PMS providers have access to extensive research, analysis, and market insights. Portfolio managers leverage their expertise to identify investment opportunities, evaluate companies’ financial health, and stay updated on market trends.
Ticket Size for PMS
The minimum investment or minimum ticket size for Portfolio Management Services (PMS) in India has evolved over time. Initially set at INR 5 lakhs, it was later increased to INR 25 lakhs and then to INR 50 lakhs in November 2019. The purpose of the minimum investment amount is to ensure investor safety, attract serious investors, and allow PMS providers to focus on a smaller segment of high-net-worth individuals (HNIs). The higher threshold helps in maintaining service quality and catering to investors with a better understanding of the risks involved in PMS.
We offer Portfolio Management Services (PMS) strategies with direct equity and mutual funds as the underlying products from the leading PMS providers in India. Some of our PMS strategies are exclusive in the market which can only be subscribed through us.
The minimum investment or minimum ticket size for Portfolio Management Services (PMS) in India has evolved over time. Initially set at INR 5 lakhs, it was later increased to INR 25 lakhs and then to INR 50 lakhs in November 2019. The purpose of the minimum investment amount is to ensure investor safety, attract serious investors, and allow PMS providers to focus on a smaller segment of high-net-worth individuals (HNIs). The higher threshold helps in maintaining service quality and catering to investors with a better understanding of the risks involved in PMS.
We offer Portfolio Management Services (PMS) strategies with direct equity and mutual funds as the underlying products from the leading PMS providers in India. Some of our PMS strategies are exclusive in the market which can only be subscribed through us.
