Expert-led Investment Approach

PMS provides individualized investment solutions to meet the needs of a wide range of clients. Investors can choose from a variety of portfolios, including large-cap, mid-cap, multi-cap, and small-cap, among others, depending on their risk appetite. The importance of PMS is from two major objectives i.e., investors who may wish to avail the services of a Portfolio Manager to manage direct holdings of equity or fixed income, or clients who are looking at specific thematic exposure which can be positioned as different strategies in their overall equity portfolios.

Complete Transparency

Every investor is informed about every transaction in PMS including the complete cost structure as is required by law. As per the SEBI, the portfolio managers are required to invest funds of their clients in the securities listed and traded on a recognized stock exchange, money market instruments, units of mutual funds, and other securities as specified by the board from time to time.

Rigorous Risk Management Mechanisms

Here are a few checks in the risk management plan that are followed by managers. The composition and the value of the portfolio, description of securities, number of securities, value of each security held in the portfolio, cash balance, and aggregate value of the portfolio as on the date of the report. Transactions are undertaken during the period of the report including the date of transaction and details of purchases and sales. Beneficial interest was received during that period in the form of interest, dividends, bonus shares, and rights shares. Expenses incurred in managing the portfolio of the client. Details of risk foreseen by the portfolio manager and the risk relating to the securities recommended by the portfolio manager for investment or disinvestment. Default in payment of coupons or any other default in payments in the underlying debt security and downgrading to default rating by the rating agencies, if any.

Regulated To The Core

PMS is a flexible investment option but it operates in a legal binding investor-fund management relationship that safeguards investors. The Securities and Exchange Board of India (SEBI) has severe standards in place for PMS managers and Asset Management Companies (AMCs) in terms of experience and operating norms. So rest assured when it comes to safety! SEBI recently even came up with a set of proposals to make PMS more transparent, and investor-friendly & to standardize the offerings. While some significant changes have been recommended, the committee has partially touched upon the fee structure, a problematic area for investors to understand.

Always Aiming for Alpha

The objective of a PMS is to deliver robust alpha as compared to the benchmark indices. As it is linked to ongoing customizations in response to changing circumstances, To analyze the financial market and current developments, researchers collaborate with a portfolio. They also keep track of an investor’s portfolio to make informed (entry/exit) decisions and ensure returns in volatile markets.

Reassuring Liquidity

The Investor may withdraw partial amounts from his portfolio, in accordance with the terms of the agreement between the client and the portfolio manager. However, the value of an investment in the portfolio after such withdrawal shall not be less than the applicable minimum investment amount. Portfolio managers cannot impose a lock-in on the investment of their clients. However, a portfolio manager can charge applicable exit fees from the client in case of an early exit.