Aspects of Portfolio Management Services (PMS)
Why
- Professionally managed portfolios.
- Customised portfolio as per the financial needs to the investor.
- Risk is also managed since the fund managers have a wealth of knowledge.
- Possibility of superior returns.
Who
- High net worth individuals.
- Individuals who have a high risk appetite.
- Investors looking for superior returns.
Taxability on PMS Investment
- Profits earned on Portfolio Management Services attract capital gain tax.
- Profits earned on the investments held for one year or less attract short-term capital gains. It is taxed at 20% plus cess.
- Long-term capital gain is paid for any profit earned after 1 year and the investor is liable to pay 12.5%, nill upto 1.25 Lakh capital gain.
How does Portfolio Management Service Work?
Step 1: The investor chooses which scheme they want to opt for; discretionary or non-discretionary PMS.
Step 2: The investor invests the minimum amount which is INR 50 Lakhs.
Step 3: If the investor opts for discretionary PMS they will receive continuous updates on the performance of their portfolio.
Step 4: Evaluation and adjustments are done based on the requirements of the investor.
Features and Benefits of Portfolio Management Services
Asset Allocation
Dividing your investment among different asset classes is defined as asset allocation. This mix needs to be done in such a way that the investors can safeguard their funds from risk and generate superior returns on them.
Customization
Portfolio Management Services provides a customized investment solution to investors. Portfolio managers have the liberty to diversify an investor’s portfolio depending upon his risk appetite and returns generated on his existing investments.
Portfolio Performance Tracking
Tracking the performance of a portfolio is one of the benefits of a PMS service. You can track your holdings in real-time and the investor is updated with the market situation as well.
Risk Management
Investments come with a certain degree of risk. With the best PMS services, you can control the amount of risk you would want to take. With real-time tracking, under the Non-discretionary PMS , you can decide if the invested instrument needs to be held or redeemed before maturity
Maintaining Liquidity
Investments are made to fulfill financial goals. The best PMS services provider in India helps in maintaining liquidity so that you can redeem your investment in time of need.
Knowledge
The best Portfolio Management Services can help in reaching your financial goals. Apart from this it also helps investors in understanding their finances. By imparting continuous knowledge and investment strategies, it helps investors to understand how the funds work and helps in making informed choices.
Types of Portfolio Management Services
There are two types of Portfolio Management Services provided by the pms companies in india
Discretionary Portfolio Management Service:
In discretionary PMS service, it is the portfolio manager that independently and individually manages the funds and securities. Investors do not have to make any financial decisions. They inform the portfolio manager of their needs and the manager works following them.
Non-Discretionary Portfolio Management Service:
When the portfolio manager manages the funds in harmony with the directions of the client it is termed as a Non-Discretionary Portfolio Management Service.
Our Partners
9,210
Partners in 769 cities across India
57,789
Customers spread over 3,000 pincodes
47,26,522
Transactions Executed
Rs. 6,349
Crore- Transaction Value
Frequently Asked Questions (FAQs):
1. Is it Worth Investing in PMS?
For most retail investors, PMS are not a viable option, given the high starting amount. Portfolio management services are aimed at HNIs who wish to invest in a multitude of investing options. However, when it comes to retail investors PMS services can be a deterrent considering the high amount required to start with.
2. What is the Minimum Amount of PMS in India?
According to SEBI guidelines, the minimum investment amount is INR 50 Lakhs.
3. What is the Difference Between AIF and PMS?
Alternate Investment Funds gives the investor the flexibility to invest in derivatives, hedge funds, listed & unlisted shares and also have a certain amount of lock-in period. PMS services monitor and create a personalized portfolio for investors to lower the risk and maximize the returns. Portfolio Management Service funds, typically are liquid and do not have any lock in periods. However, both products tend to have high risk and high reward stances.
4. How can I Invest in top pms in india?
Before investing in a PMS account, you will first need to establish a separate bank Demat account. Once the account is opened you will need to give a power of attorney to your portfolio manager over this bank account and Demat account. You will have the right to access these accounts and your portfolio manager will have to share a performance review of your investment once every six months.
5. Can an NRI Avail the Portfolio Management Service?
As per RBI guidelines, NRIs can invest in a PMS account by opening a Portfolio Investment Scheme account. This has to be done through banks and other financial distributors.