24th Aug 2018 | 12:00 PM IST
24th Aug 2018 | 12:00 PM IST
Portfolio Management Service is the most popular service among investors. Most of the brokerage firms and investment advisories offer this service with slight variations. Portfolio management service(PMS) is a 360-degree service for any investor. The service helps investor at each stage of investing and also ensures the profitability. The below article deals with the basics of the portfolio management services. It explains the meaning, process, benefits, disadvantages, and charges of the service in depth. However if you want to explore the best available PMS in India then read Best PMS Services In India.
Before jumping directly to the meaning of the portfolio management services you need to understand what is portfolio management?. Portfolio Management is nothing but managing your portfolio investment tactfully, by selecting the best mix of investment options in the right proportion and continuously shifting them in the portfolio. That is portfolio management is just like cooking the best recipe for your appetite to increase the return on investment and maximize the wealth.
Portfolio Management Service is a process of investment analysis and portfolio management. It's an investment product usually availed by the investors who have high net-worth. It's more of an investment portfolio monitoring for those who can't do it for themselves. The reason this service is special is that it gives the subscriber a complete freedom from the hassles and complexities that are associated with equity investment. Namely, research and analysis of the stock, keeping track of all the business and political activities which can potentially have an impact on your investment. That's too much of work for a working professional.
In PMS, you virtually have to do nothing. Your entire portfolio is managed by investment professionals. These professionals have a thorough understanding of your investment goals and they draw the strategy accordingly. The portfolio manager does all the research of the stocks and takes decisions about the allocation of funds. He/she keeps track of all the activities and keeps the investors informed about developments in the portfolio.
In the above explanation, you can understand the meaning and importance of the portfolio management and portfolio management services. But being an investor, you should also understand the process of the portfolio management. After reading the above stuff you may have stricken up with the question that what these professionals actually do with our money? What's the way that they manage our PMS investment. So let's just break down the process of portfolio management for you.
The idea of the PMS is that you hand over your portfolio to a person who is equipped with knowledge and skills to execute investment decision on your behalf. In keeping with that theory, the portfolio manager has the full control of the portfolio. However, you have access to your portfolio. You can log in to your demat account any time you want and get the real-time information of your holdings. The most important thing that you need to understand is that the demat and trading account is always in your (subscriber) name. Therefore, the account holder is the sole beneficiary of all the profits, losses, dividends, bonus shares and also liable to taxes that the account incurs.
A best portfolio management service helps you in each level of the investment since from constructing your portfolio to evaluate it periodically. Let's check the process in a detailed manner one by one.
While designing the portfolio as per your need the service provider even keeps in mind the objectives to provide you with the best possible returns.
The biggest hurdles of opting for portfolio management services are its fees and charges. The fees charged by PMS comprises three components. The upfront fee, management fee, and performance fee. Some of the PMS offer fixed fee also. Letâ€™s just understand what all are the charges you incur when you opt for the PMS.
With all the above discussion we can summarise the basic conditions of PMS. PMS is an ideal investment tool for High Networth Individuals (HNI). The reason is the PMS service is regulated by the stern conditions of SEBI. One of the fundamental condition is that to subscribe to PMS the investor has to bring at least 5 lakh- 25 lakhs capital or has to have holdings. Generally, only HNIs have such amount sitting idle in their accounts. Thus, instead of keeping the money in fixed return instruments like fixed deposits then opt for PMS which can give far better returns to their money. Motilal Oswal, ShareKhan, SMC Global are at the top of the list of portfolio management services providers in India.
The brokerage and fees structure is altogether different and quite costly. So before going to the decision making level, one needs to check his own eligibility for PMS. But what about those investors who are dreaming for the same kind of service but are short of funds? For such investors, Niveza Indiaâ€™s flagship product - p360Â° (Personalised Research Service) is made for everyone, from beginner to HNI's. In this service, all the investors need to do is bring Rs.2,00,000 capital, choose a plan that suits their requirements and then sit back and see their portfolio value soar
It is natural for most of you to think if the PMS is so rewarding then why invest in equity mutual fund at all? That's a valid question. But we have to understand why one invests in mutual funds. The objective of equity mutual fund is to disregard the market cycles and keep on investing a certain amount on a regular basis in a disciplined manner. On the other hand, PMS is more time sensitive. Here the portfolio manager has to directly answer the clients and have to produce good returns regardless of how the markets are behaving. For making money out of markets you always need risk appetite and understanding of the market. So letâ€™s understand how these close competitors PMS and Mutual Funds are different from each other.
So now you know, what is portfolio management, how the portfolio management service works and how its different from mutual funds, now all you need to do is take a right call in a favor of wealth creation. Whatever the choice may be, remember you are not only investing money in the markets, but you are investing your time also if you are aiming to reap returns from the market movements. Take professional help in any case, if you lack there you can even get in touch with us. We at Niveza believe that Time is Money and we are there to help you all the time to take the right decision. For any queries you can reach us at 09637171436, we are there to help you.
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