PMS is a SEBI licensed investment platform for investing in a portfolio of securities and managed by a Portfolio Manager. The underlying securities in a portfolio can be stocks, fixed income, mutual funds, cash, structured products and other individual securities or any other securities. In a PMS, a client's portfolio is unique and can potentially be customised to meet specific investment objectives.
A Portfolio Manager is the entity, offering (PMS) services of advisory and/or the management of a portfolio of securities of the clients on their behalf. In India, a Portfolio Manager must be licensed from SEBI to be able to offer PMS to clients.
An investor can invest fresh money in PMS and the portfolio manager will construct a portfolio by deploying that money. The investor can also transfer his existing (mutual funds) portfolio to the PMS offered. In such a case, the portfolio manager will revamp the portfolio in line with the strategy and investment philosophy.
Types of investment services in PMS:
There are two types of PMS generally offered to the clients. They are as follows:
In India, the discretionary PMS is more popular and widely offered, since it offers the benefits of customised portfolio management by professional & experienced portfolio managers.
Rationale for PMS:
Discretionary PMS is an attractive investment product for investors owing to its many unique benefits, which stated below.