Portfolio Management Services (PMS): PMS is a customised investment service where a professional portfolio manager manages investments on behalf of high-net-worth individuals, tailored to their specific needs and risk tolerance.
Portfolio Management Services (PMS) is a customized investment service offered by professional portfolio managers to manage investments on behalf of high-net-worth individuals (HNIs) or institutional investors.
In PMS, investors hand over the management of their investment portfolio to a professional portfolio manager who makes investment decisions on their behalf. The portfolio manager designs and manages a personalized investment portfolio tailored to the investor's financial goals, risk tolerance, and investment objectives.
PMS is typically targeted towards high-net-worth individuals (HNIs) who have a substantial amount of investable assets. As per SEBI, the minimum investment required for PMS in 2024 is 50 lakh, but this number can change. Some PMS may accept the client only if the investment amount is much more than the SEBI Limit. Some PMS providers may also offer services to institutional investors such as corporate entities, trusts, or family offices.
PMS offers personalized investment management, professional expertise, customization, and flexibility. Investors benefit from having a dedicated portfolio manager who actively manages their investments, tailoring the portfolio to meet their specific needs and objectives.
PMS providers offer various investment strategies to suit different investor preferences and risk profiles. Common PMS strategies include growth-oriented, value-oriented, income-focused, or sector-specific strategies. Some PMS providers may also offer thematic or concentrated strategies.
PMS fees typically include management fees and performance-based fees. Management fees are charged as a percentage of assets under management (AUM), covering the cost of portfolio management services. Performance-based fees, if applicable, are charged based on the portfolio's performance relative to a predefined benchmark or hurdle rate. There is a wide range of fees structure that can be implemented.
Like any investment, PMS carries certain risks, including market risk, concentration risk, liquidity risk, and manager risk. Investors should carefully consider their risk tolerance and investment objectives before investing in PMS and understand the potential risks involved.
When selecting a PMS provider, investors should consider factors such as track record, reputation, investment philosophy, performance track record, transparency, fees, and client service. Conducting thorough research, reviewing past performance, and seeking recommendations or referrals can help investors make an informed decision.
We at SIDA services can assist you in research for PMS.
The minimum investment requirement for PMS varies depending on the PMS provider and the investment strategy. While some providers may have a minimum investment threshold of a 50 lakh (or minimum limit set by SEBI), others may require higher minimum investments ranging from several lakhs to crore.
Yes, PMS is regulated by the Securities and Exchange Board of India (SEBI) in India. SEBI sets regulations and guidelines to govern PMS providers, ensuring investor protection, transparency, and integrity in the PMS industry.
Investors considering PMS should carefully evaluate their investment objectives, risk tolerance, and financial situation before investing and seek professional advice if needed.