What is PMS?
PMS means “Portfolio Management Services”. Actually, every share company has this service providing facility which facilitates its customers the back-end support for managing their portfolio.
The PMS provides you the experts who are well-versed with the market happenings and they can better guide you on important investment decisions. What else they provide, let’s see below :-
- They take the whole responsibility to manage your portfolio.
- They understand your requirements for what kind of returns you actually expect from your investments and in which segments you prefer to invest in.
- They track the market and invest your money keeping your requirements in their mind.
- They tend to take such decisions that can prosper your wealth tremendously.
- They advise you on whatever you are going to do in the share market.
What are the Features of PMS?
PMS is a service extended to the investors and traders that are fine in handing over their capital to a fund manager. But having a basic understanding of PMS is necessary to get a grasp on the PMS features. With this, let’s discuss the basic features of portfolio management services.
- PMS is registered by the SEBI market regulator.
- PMS deals with Equity and debts.
- PMS services are availed by banks, brokers, independent investment managers, or AMC (Asset Management Companies).
- Actually, it is a kind of a drawback for retail or normal investors because PMS suits only to those who have a large affording power or who is a wealthy person. The PMS charges a large percentage of money from its users which are not within the capacity of a normal or average class investor. There are so many PMS in the markets that are providing such services. Their charges to manage your portfolio would really vary. Some charge 2.5 percent of the fund size, while others charge more.
- The minimum investment required to open a PMS account is Rs. 5 Lacs. However, different providers have different minimum balance requirements for different products.
- The service providers have different models portfolios for the investors which the investors can choose as per their financial goals and requirements. They can even customize them if they want some additional or want little adjustment.
When such attractive facilities are provided by the PMS then why not we will bother to know about the names of those PMSs. In the upcoming next subtopic, you will see the best performing PMS in India and also come to know about their deep insight details.
What are the Types of PMS?
There are three types of Portfolios in PMS, you can choose any of them-
- Discretionary PMS– Discretionary Portfolio provides the service provider a right to make decisions on behalf of the client, whether he wants to sell or buy the shares. He is not bounded to consult with the client.
- Non-Discretionary PMS- This is the just reverse of the above. Here, the service provider consults with his clients on investment decisions or buying and selling of shares before transacting any event. The decision making power lies in the hands of the client only. The service provider can advise and assist them with things, but the final executions will be done according to the client’s order.
- Advisory: Only advice is given. No execution.
