Portfolio management services or PMS is the customized solution for the high net-worth investors; it provides higher flexibility with the investor’s money & higher returns as well. Thus, if you have any substantial amount that you wish to invest, then PMS Investments will prove highly beneficial. Let us go in the details and learn more about PMS investment options.
What is PMS Investment?
PMS or Portfolio Management Services is making the investment portfolio in Debt, Stocks, and fixed income products that will be managed by the professional fund manager and can be modified as per your specific investment goals and requirements. When you plan to invest in PMS funds, you own securities, unlike the mutual fund investor that owns units of an entire fund. Also, you have complete freedom & flexibility of modifying your portfolio and address any personal preferences or financial goals.
How Does It Work?
PMS is generally offered by the brokerages & mutual funds that are registered with Sebi. There’re two kinds of PMS options: Discretionary & Non-Discretionary PMS. In discretionary PMS, the wealth manager takes the investment decisions for the investor. And in the non-discretionary PMS, the wealth manager suggests the investment ideas and the decision has to be done by a client.
Where PMS Scores?
Let’s now know how PMS investment is positioned to the investors & where it scores over various other management platforms such as mutual funds:
Unlike mutual funds, you aren’t subscribing to units of the pre-created investment portfolio. The mutual fund schemes mainly are mass customized. But, PMS is totally customized as per your needs.
The PMS Service providers like PMS AIF World offer various online add-ons such as simple access to the portfolio, analytics, content and blogs to improve your experience. These are helpful value-adds particularly if you’re looking at value for your money.
Transparency is key to the PMS. Like stated earlier, Portfolio Management service has been regulated by the SEBI regulations, thus there’s an oversight on what’s being done or how funds are managed. The PMS providers are needed to give a range of disclosures to their PMS holders & to its regulator. It improves transparency for the PMS holders, even though PMS doesn’t need to make any public disclosures, unlike the mutual fund.
Generally, PMS investment funds give higher returns for two important reasons. First one is they can spend energy and time picking good quality stocks & holding on for the longer time frame. Secondly, as PMS is highly flexible compared to the mutual fund, it will use derivatives & structured products to improve returns. And these make PMS much more attractive. As we have discussed in detail what is PMS investment, let us check out how you can invest in it?
How to invest in PMS?
There’re two ways an investor may invest in the Portfolio Management Services:
- Via Cheque payment
- Via transferring current shares held to a PMS account. The portfolio value transferred must be more than the minimum investment criteria.
- The customer will have to sign some documents such as– the PMS agreement with the provider, POA agreement, Demat account format and other documents such as address proof, PAN, and ID proofs are compulsory.