Overview about PMS services

A large part of our urban population invests in Stocks. They do some research ourselves and/or take some stock tips from their closest friends. Those who have stayed invested for long term (5 or more years) still make some money, but those trying to churn stocks everyday thinking they have mastered the art of trading burn their hands big time.

Not many people know that there is a service called Portfolio Management Service. Often called PMS services in India.

What are portfolio management services (PMS services)

Portfolio management services are professional services, focusing on growing your investments safely to meet your financial goals.  PMS services are provided by fund managers backed by a research team which does the backend homework for the fund managers.

You open a Demat account with them and they would buy stocks in your account. The key feature of PMS is that account is yours but you don’t manage your money. You don’t take decisions what to buy and when to buy or when to sell. You give them a power of attorney to do this. They manage your fund and keep a track of it at all times so that your capital is protected and you meet your investment objectives.

Why do we need Portfolio Management Services? After all we’ve been living without it for so long!

We all try and manage our portfolios ourselves, without realizing that the opportunity cost of managing the portfolio ourselves is too high. Which essentially means, that if portfolio managers are able to get 15-20% returns (or even more in some cases) on a CAGR basis, we normally end up making losses (or marginal profits) when we handle our portfolios ourselves. If we calculate the difference between what we have made for ourselves and what a portfolio management service could have earned for us, you would be shocked to see the results and for sure regret not opting for PMS services earlier.

What are the benefits of Portfolio Management Services (Equity PMS services in India)?

  1. Your money is managed by experts
  2. The portfolio is concentrated and not over diversified with 40-50 companies(which typically reduces the return). Of course the case is true during the market fall, but since the companies invested in are chosen with thorough research, you really don’t have to worry about losing money. The stock prices of these companies are the first ones to come back when the market rises.
  3. Investment is done in high growth companies and where the management has full conviction
  4. Even in a market correction, we don’t have to worry as the companies are fast growing companies.
  5. Low churning, means low cost for the client.
  6. Risk of others selling in the market doesn’t affect your portfolio.
  7. Transparency- PMS has better transparency because investor knows the stocks holdings of his portfolio. He knows when and what Fund Manager is doing with his portfolio. Besides, we also have one of the finest and most dedicated research teams with experts who have in-depth, unsurpassed knowledge of the market place

List of PMS services in India 

There are lot of companies providing PMS services in India. Such as Aditya Birla Portfolio management services, Porinju, Sundaram,Shepherd’s Hill, ICICI prudential Portfolio Management Services, Motilaloswal PMS services, Geojit Portfolio management services and the list goes on….The fee, returns and risk, varies from AMC (asset management company) to AMC. Call us to know more about PMS services in India. We will give you best advice based on our knowledge and experience.

When investing in a PMS, what’s the minimum ticket size?

The minimum amount that can be invested in PMS services in India is 25 Lacs (INR 25,00,000/-)

What is the best time to go for PMS services?

The best time to start PMS is the day you have saved 25 Lacs (INR 25,00,000/-) which you would not need for next 5-10 years. The apprehension people have is what if the market goes down after they invest.

There are following ways to look at it.

There is no one on earth who can time the market.

If the horizon is long (which we suggest should be more than 5 years), then there is no reason to worry. In one of the worst falls of stock market in 2008, even if you had invested at the peak, your money would have grown in 2013.  Important is the horizon and patience to hold on.

Even if the market corrects immediately after you invest, it’s a good sign. The worst is over. It’s just like taking a cold shower. The moment you go in, the chill is only for a short time and then it becomes normal for you.

At the same time, if we do not invest, we are always losing out on time, which is one of the most important parameter in creating wealth.