Portfolio Management

SOLUTIONS FOR ASSET MANAGEMENT

Portfolio Management Services are used by high net worth individual investors to invest in stocks, fixed income instruments debt, cash, structured products and other individual securities. It is offered by brokerages and mutual funds registered with SEBI. Minimum investment amount for PMS is Rs. 25.00 Lacs.

‘Bonvista’ offers Portfolio Management Services to clients who have high net worth, intends to have personalised investment solutions & high level of service

FAQ

PMS is a Portfolio Management Services that are offered to investors. Under PMS, entities manage investment of investors professionally and with an intention to deliver better risk-adjusted returns to their clients.

Individuals and Non-Individuals such as HUFs, partnerships firms, sole proprietorship firms and Body Corporate can invest in PMS. Even NRIs (Non-Resident Individuals) can invest in the PMS as well through the NRE or NRO accounts. 

PMS can be offered by the entities that are registered with SEBI (Securities Exchange Board of India). Registered entities have to follow the rules and regulations set by SEBI.

Minimum investment required in PMS is Rs. 50.00 Lacs. Hence, PMS is for High-Net Worth Individuals.

In order to invest in PMS client has to fill ‘Client Registration Form’. It is an agreement for a Principal-agent relationship that will allow the agent to act on your (Client’s) behalf.

Client is required to open a D-mat and PMS account. For opening these accounts, basic KYC document such as Aadhar card/ ID proof/ bank statement/address proof/ PAN card copy is required.

There are three types of PMS. Non-Discretionary, Discretionary & Advisory.

Discretionary: Right from selecting the securities to time-frame of investment, all the investment decisions are solely taken by the Portfolio Manager

 

Non-discretionary: Portfolio Manager recommends the investments and client takes the decision and Portfolio Manager executes the transaction.

 

Advisory: Client is the king. All the investment decisions and execution part are taken care by the client. However, Portfolio Manager recommends the investments.

 

Customized & separate portfolio per client, better returns, transparency in structure & data management, possibility of control over investment decisions are some of the benefits of PMS.

Yes. Investments in PMS contain a certain amount of risk. There is a possibility of erosion of the principal amount invested, as it depends on the security selected.

Mutual funds are open for everyone. On the other hand, PMS is for a niche set of investors (High-Net-Worth Individuals). PMS is a personalized and customized portfolio management service whereas Mutual Funds are more standardized. PMS is having a high entry threshold (Rs 50.00 Lacs). Mutual funds are suitable every small investor as the retail client can start investment in MFs with as low as Rs. 500 per month.

It remains same as if the investor is accessing the capital market directly. However, it is recommended that the investor should consult his tax consultant for the same. The Portfolio Manager ideally provides audited statement of accounts at the end of the financial year to assist the investor in assessing the tax liabilities.

In accordance with regulation of SEBI (Portfolio Managers), portfolio manager shall charge a fee as per the agreement with the client for offering the portfolio management services.

The fee can be the fixed amount or a performance-based fee or a combination of both. However, there is no upfront fees shall be charged by the portfolio manager directly or indirectly to the clients.

The client may withdraw partial amounts from his portfolio, if it is in accordance with the terms & conditions of the agreement executed between the client and the Portfolio Manager. However, the value of investment in the portfolio after such withdrawal shall not be less than the applicable minimum investment amount.

A high Net worth Individual with high risk appetite who is looking to invest in stocks, fixed income, debt, cash, structured products and other individual securities, for long term wealth creation. The client who appreciates the value of knowledge & service and wants the portfolio to be managed personally, can go for PMS.