What is PMS?
Portfolio Management Services offer a customized investment portfolio in equity or debt asset classes. The objective is to generate superior returns. Professional fund managers provide these services.
The services are often tailor-made to suit the financial goals of investors. PMS offers professional management of your portfolio to create wealth. A power of attorney is executed by the investor in favour of the Fund Manager to operate the person’s Demat account. PMS is like Mutual Funds; both are professionally managed. However, in PMS, the investor owns the underlying asset, unlike in Mutual Funds, where they own units representing the stock.
There are two types of PMS
- Discretionary PMS: It is Discretionary when the fund manager is empowered to take decisions on behalf of the investor.
- Non-Discretionary PMS: It is Non- Discretionary when the fund manager only offers suggestions to the investor, and the investor takes the final decision.
Benefits of PMS
- Portfolio Monitoring: Active monitoring of portfolio to track developments impacting it, with a view to maximising returns on investment.
- Customised Portfolio: Personalised to achieve key investment goals.
- Professional Management: Experienced Portfolio managers who build an investment portfolio to meet your desired objectives.
- Convenience: No administrative hassle in managing your portfolio. You can review the transaction summary periodically and get periodic updates on performance.
Things to keep in mind
While the benefits of PMS are numerous, an investor must keep in mind the following aspects before choosing PMS:
- Minimum Investment Amount: Is currently Rs. 50 lakh.
- Fees: PMS, in most cases, involves, entry charges, management fee and performance fee – either fixed or variable.
Fundtech Edge is one of the known Distribution House in India having tie-ups with leading PMS in the country.