Portfolio Management Services (PMS)

Portfolio Management Services (PMS) offer tailored investment strategies designed to meet an investor's return expectations while aligning with their risk tolerance. This service is delivered by licensed portfolio managers who use their expertise to construct and manage a customized portfolio, which may include equities, fixed income instruments, real estate, commodities, cash, or structured products. A portfolio manager thoroughly evaluates an investor’s financial goals and risk appetite to create a strategy that meets their specific investment needs. Their deep market knowledge allows them to make more informed and strategic investment decisions compared to individual investors

Who Is PMS Designed For?

PMS is primarily aimed at High Net-worth Individuals (HNIs), requiring a minimum investment of ₹50 lakhs. Each service is tailored to fit the client’s unique financial situation, objectives, and risk-bearing capacity. To ensure this alignment, a detailed Investment Policy Statement (IPS) is created, outlining the client’s financial goals, time horizon, liquidity needs, tax considerations, and any other specific constraints. The manager then uses this framework to build and manage the optimal portfolio.

Categories of Portfolio Management Services

1. Active Portfolio Management

This approach seeks to outperform a benchmark index (e.g., Nifty) by actively buying and selling securities based on market research and forecasts. Active managers aim to generate higher returns, though this often involves taking on greater risk and incurring higher transaction costs.

2. Passive Portfolio Management
In contrast, passive management replicates the composition and performance of a specific market index. By mirroring index holdings, passive strategies minimize trading activity and associated costs. The returns typically align closely with the index, resulting in less variability but also little opportunity for outperformance.

3. Discretionary Portfolio Management
Under this model, the portfolio manager has full authority to make investment decisions on the client’s behalf, based on the IPS. This hands-off option is well-suited for investors who prefer to delegate their investment decisions due to limited time or expertise. The flexibility and professional oversight justify the higher fees associated with this service.

4. Non-Discretionary Portfolio Management
In this arrangement, the portfolio manager provides recommendations, but the investor retains control over the final decisions and trade execution. This model is ideal for investors who want expert guidance but prefer to remain actively involved in their investment process.