Do you have an interest in the stock market? Are you aware of portfolio management services? As an investor, it’s your fundamental duty to acquaint yourself with the Benefits ofPortfoliomanagement services. PMS helps the investors in getting fruitful returns from their investment by diversifying the investment across different financial products.
People often consider the stock market as the shortcut to earn big money.
But, without any prior knowledge about the working of the stock market, you will not achieve your dream investment returns. Adding more and more stocks to your portfolio will not result in increasing your returns. Instead, the unnecessary investment will put your portfolio on the back foot.
To ensure greater profitability, take help of the portfolio managers to know which stocks to invest in. But, before you avail the PMS services, it’s essential to know what PMS is all about and explore its benefits.
Benefits of Portfolio Management Services Basics
Are you in need of a hassle-free way of managing your equity investments? If yes, PMS is what you need to go for. In PMS, the investment professionals manage the portfolio on behalf of the investors. Under PMS, the portfolio managers will look after the equity investments of high-end clients against a fee.
PMS is primarily of two kinds namely – discretionary and non-discretionary PMS. In the case of the former, the decision regarding the funds lies entirely in the hands of the fund’s manager. While in non-discretionary PMS, the fund’s manager only gives advice and suggestions. But, the final decision is taken by the investor.
Top Benefits of Portfolio Management Services
Here is a quick look at the benefits of portfolio management services offered by multiple financial houses:
Focus on Quality Portfolio
Managing portfolio on your own is not only challenging but there is a compromise with quality as well. If we talk about listing on the important stock indexes like nifty, individual investors have a lower share of holdings. Individual investors have low-quality stocks in their portfolio as they focus on price rather than value.
Individual investors often look at short term gains.
It’s to be noted that retail investors do have quality stocks in their portfolio. But, they have the habit of selling them at the time of profit and holding onto stocks in case there is a decrease in value. For this reason, it’s better to go for PMS to build a quality portfolio.
Independent and isolated portfolio
One of the main benefits of Portfolio Management Services is that the holdings are not impacted by the behaviour of other investors. In the case of PMS, every investor has complete discretion on the buying, selling and the time period.
Holding and experiences of other investors will have no impact on another person’s investment. In the case of PMS, inflows are subject to the client’s preferences and discretion.
Transparency in managing the portfolio
PMS investor has the advantage of getting the information, regarding even the smallest detail about the portfolio. The investor gets information about every transaction and can view the live portfolio on managers’ website.
In case of mutual funds the investor can view the holdings only once in a month or quarter, hence have less transparency as compare to PMS.
Scope of higher returns and adjustment of portfolio
PMS is more aggressive hence has the opportunity for generating more returns. An efficient and skilled portfolio manager can help investors in maximizing their portfolio management services returns. They focus on increasing both the short term as well as long term returns, depending on the investment goals.
The portfolio manager can rebalance the portfolio to maximize the returns by reducing the risks. This adjustment is done when you don’t get expected returns from the portfolio because of market fluctuations.
Transparent expense ratio
PMS offers flexibility as the expense ratio is both transparent and customizable. In PMS against a certain amount of fees, the investor gets details on the expenses incurred on the portfolio on a monthly basis.
In addition to the expense details, investors get the advantage of customized expense structure.
Diversification of risk
Since the stock market is prone to fluctuations, the risk factor in the case of high-value assets is more. But experienced portfolio manager can help you in reducing the risk by diversifying the risk.
Well, every coin has two sides, always. For a wide range of benefits – there are always a few concerns as well. In the case of portfolio management services, here are a few:
Tax implications: PMS portfolios have the same tax implications as that of the individual investors.
Documentation: PMS involves the opening of demat account and registering power of attorney to the portfolio manager. Hence the documentation is more troublesome than the mutual funds.
In case you are looking to avail PMS for your funds, let us assist you in taking the next steps forward. Just fill in some basic details in the form below and a callback will be arranged for you: