Benefits of Investing in Portfolio Management Services
PMS can be discretionary (where the fund manager makes choices on behalf of investors) or non-discretionary (where the fund manager must get an investor agreement for recommended investments). Mutual Funds are another option for professionally managed stocks investments, and they are also a popular choice. Take a look at some of the advantages of PMS:
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People who manage their investments buy less quality and place a greater emphasis on price rather than value. Individual investors (Non-Promoter Non-Institutional [NPNI]) have a lesser proportion of holding in the major indexes like Nifty, BSE 200, or even Nifty 500, even though there are thousands of listed firms. Non-index smaller firms have higher retail or NPNI holding. In their portfolios, there is a lean toward lower-quality equities. Nifty accounts for about 60% of the market capitalization, BSE 200 accounts for nearly 85% of the market capitalization, and Nifty 500 accounts for nearly 94 percent of the market capitalization.
What is PMS
Portfolio Management Services (PMS) refers to an investment portfolio in equities, fixed income, cash, debt structured products and other individual assets that is managed by a professional money manager and can be adjusted to fit specific investment objectives. Unlike in mutual funds where investor owns units of the fund, when you invest in PMS funds, you own individual securities. You have the suppleness to customize your portfolio to meet your specific requirements and objectives. Despite the fact that portfolio managers may be in charge of hundreds of accounts, yours may be one of a kind.
Portfolio Management Service (PMS) – Things to Know about the Fund
Portfolio Management Service, or PMS, is a professional service in which certified and experienced portfolio managers, supported by a research team, manage stock portfolios on behalf of customers rather than the clients managing their own. India has one of the oldest stock market ecosystems globally, and the direct equity investment craze has been around for decades, with numerous iconic listings in the markets since the late 1970s. A substantial number of investors have equities portfolios in their Demat accounts that they manage based on their own experiences or with the help of brokers and equity consultants.
There are millions of Demat accounts; some of the largest publicly traded firms have as many as 2-3 million owners. While brokers provide equities research, advisory services, and an operational platform, investors are generally required to participate in investing discretion and operational elements. More crucially, both investors and service providers share the responsibility for outcomes. On the other hand, professionally managed portfolios hold the portfolio manager accountable to the investor. They are managed for a fee, and the investor has access to everything, including research, investing, and operations.
