What are Portfolio Management Services (PMS)

PMS or Portfolio Management Services is a licensed and professional investment service offered to cater to the objectives of niche segment of long term investors with minimum investment ticket size of Rs 50 lacs.

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The difference between successful people and really successful people is that really successful people say no to almost everything. –Warren Buffett

The above quote explains how PMS and AlFs are different from Mutual funds. PMSs focusses on a few selected companies and says no to the rest, whereas Mutual funds are made to follow too diversified approach because these are products meant for the masses. Though this helps mutual funds in reducing volatility to an extent, but more doesn’t always mean low risk, and in fact, exposure to more companies may increase the risk of buying less known. Also, high diversification beyond a point comes at a cost of limiting potential long term performance as in general, most mutual funds hold 40 -70 stocks making it no different than an index.

Types of Portfolio Management Services (PMS)

1. Discretionary PMS

In a discretionary PMS, the portfolio manager handles each client’s assets and securities separately and independently, according to the client’s needs- but takes decisions on his own.

2. Non-Discretionary PMS

In the non-discretionary PMS, the portfolio manager manages the money according to the client’s instructions.

Advantages of PMS Service

1. Concentrated, and Focused

PMS strategy is meant to invest in a concentrated basket of 15-25 well-researched companies. Such a focused approach generates superior long term performance and is meant for sophisticated and informed investors who really want money to work harder for them and are focused on long term performance and, not bothered by short to medium term volatility.

2. You own your own portfolio

PMS strategy works on the concept of personal demat holding and with common research, and not a pooled stock portfolio across investors. With the rising participation of young and retail investors in mutual funds, pooled stock portfolio concept is prone impulsive and behavioural flows which rise with rising markets and peak out at higher valuations, and fall with falling markets and bottom out at attractive valuations. In PMS, one investor’s behavioural reactions to market movements doesn’t impact other investor’s portfolios.

3. Own businesses, and not units

PMS strategy gives access to direct shareholding in the businesses, making it a more direct method of investing. When one invest in companies, it opens the door to not only grows with the rise in corporate earnings and dividends, but also the growth of investors own intellectual capital. As here investor clearly gets to know what’s happening in the portfolio. In the long term, growth in all three matters and adds up.

4. Buy and hold, with low churn

Since PMS works with a concentrated approach, there is no compulsion to churn a stock that is performing irrespective of its rising weight in the portfolio over years. What matters is the expected earnings and growth potential in the businesses held. Unlike this, in mutual funds, beyond a point, at times fund manager may be forced to let go of a performing stock to cut its rising weight, given the regulations.

Why Choose PMS AIF World?

PMS AIF World is a New Age Investment Services Company, providing analytics-backed good quality investing service experience with an endeavor and promise for wealth creation and prosperity. Over 4+ years, we have been managing 350+ UHNI & NRI families, across 600 Cr+ assets. We offer the right Service, Products, and Portfolios to help you make informed investment decisions.

We have close to 200 PMS strategies listed on our website and each has its own trajectories and characteristics; our proprietory QRC framework helps you choose the strategies that work best for you. This analysis, our trademarked proprietary framework, deep dives into the performance of the portfolio to bring out the metrics relevant to you as an investor and helps you choose the portfolio that will best serve your investment objectives. By looking at factors like outperformance compared to multiple indices, risk-adjusted returns, consistency of returns, and other such parameters, QRC is one of the most effective ways of measuring all-round portfolio performance.

To view the latest QRC report, please visit: https://www.pmsaifworld.com/best-30-pms-aif-qrc-report-cards/

PMSs Performance #

Company Name Scheme Name Category AUM (in Rs. Cr) 1m Return 3m Return 6m Return 1y Return 2y Return 3y Return 5y Return 10 y Return SI
ASK Indian Entrepreneurship Portfolio (IEP) Multi Cap 20,895.00 0.4% 3.6% -2.3% -3.6% 25.1% 15.8% 13.2% 19.8% 18.0%
IIFL Wealth & AMC Multicap Multi Cap 3.1% 5.1% 4.3% -0.7% 25.0% 17.8% 15.7% - 18.5%
Itus Capital Fundamental Value Fund Multi Cap 796.37 2.8% 3.5% 0.4% -3.9% 20.0% 20.5% 15.4% - 20.0%
SageOne Investment Small Cap Portfolio (SSP) Small Cap 910.00 -0.2% 2.0% -5.4% 0.1% 38.9% 38.6% - - 31.7%
UNIFI Blended Fund-Rangoli Mid & Small Cap 2.8% 5.4% 3.1% 1.8% 35.1% 37.5% 19.8% - 22.5%

#Returns as of 31 Oct 2022. Returns up to 1 Year are absolute, above 1 Year are CAGR.

Get access to 200+ PMS performance data.

Check & compare between various PMSs across benchmarks.

Check out monthly Peer group PMS reports with performance data as of every month.

Frequently Asked Questions - FAQs

1. Why should one invest in a PMS?

• Concentrated, and Focussed**
• Own businesses, and not units**
• You own your own portfolio**
• Most Transparent**
• Buy and hold, with low churn**

2. Who can invest in a PMS?

Individuals and Non-Individuals such as HUFs, partnerships firms, sole proprietorship firms and Body Corporate.

3. How are PMSs taxed in India?

Since under a PMS, investments are held directly in the investor’s name (and not via a trust like in a MF or AIF), the tax liability for the PMS investor is the same as the investor directly buying or selling shares/securities in his own name.

Income from shares purchased through PMS is taxable as Capital Gains- could be Long term or Short term in nature.

– Gains from stocks that are held for more than a year get treated as long term and are taxed @ 10% plus surcharges.
– For the holdings that traded within 1 year, treatment is short term, and are taxed @ 15% plus surcharges.
– For the income earned in form of dividends credited in the financial year, dividend distribution tax is already deducted at the source and in the hands of investor, these dividends tax-free. But, if total income from such dividends earned in a financial year is more than 10 lacs across all investments, then additional dividend income tax is also applicable.

Check the whole list of FAQs – PMS FAQs

The safest and most potentially profitable thing is to buy something when no one likes it. – Howard Marks

The future is never clear; you pay a very heavy price in the stock market for a cheery consensus. Uncertainty is actually a friend of the buyer of long-term values. -Warren Buffett

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