The objective of Care PMS is long-term wealth creation for the investor by searching for the right opportunities in the Indian equity market at the right time.
Instead of creating any specific strategy, the company offers a concentrated investment portfolio to provide a healthy return to the investors to minimize the PMS investment risk.
Care PMS Review
Care PMS started its journey back in the year 2007 with the aim of equity investment through the research skill and investment philosophy of the company to provide a superior return or wealth creation for the clients.
The meaning of Portfolio Management Services is very diversified as it helps an individual to diversify the risk and build wealth.
Care got SEBI registration in the year 2011 to serve the clients as a portfolio manager. Very soon the company crossed the client relationship 100 plus in the year 2014 and in the year 2015, it crossed 500 plus client relationships.
The total asset managed by the company as of 31st March 2019 is ₹275 Crores which is spread between the NRI and domestic clients.
Care PMS portfolio management service is managed by an excellent team of Chartered Accountants (CA) who work together to complete a common dream to become a trusted PMS house and wealth creation for the clients.
The investment team of the company has more than 2 decades of experience in the capital market. The clients of the company are Individuals, NRIs, and corporate.
The portfolio manager ‘Care PMS’ is confident about the growth prospect of the Indian economy. So, it invests only in listed Indian stocks according to the risk appetite of its investors. The research team of the company has a very good understanding of the Indian economy so they can easily pick the deep growth potential companies, which can give a return in 2-3 years of time horizon.
Equity, Trust, and Service, are the three pillars of the company.
In this article, we will cover all important aspects of ‘Care PMS’ like the types of portfolio management services offered by the company, details of different PMS strategies employed, commission model and structure, performance/return of strategy, investment plans, customer support, conclusion etc.
Care PMS Types
Care PMS offers two types of PMS services to the clients.
- Individual portfolios (Discretionary PMS)
- Managing restrictions (Non-Discretionary PMS)
Individual Portfolio (Discretionary PMS):
Care PMS does not work on any model portfolio or strategy. The company constructs an individual investment portfolio for each client based on their timing of fund availability and the opportunities available at that point of time.
In other words, there is no requirement of total funds at one time because the company does not work on any ready portfolio model.
The client is only responsible for funds arrangement and the rest is managed by the investment team of the company.
Managing Restrictions (Non-Discretionary PMS):
Managing Restriction is the second type of PMS service offered by the Care PMS. Under this service, the company provides services where the company can comply with a certain restriction that a client may have towards the listed companies.
That restriction may have due to the nature of their work.
Care PMS Fund Managers
The company has a team of great portfolio managers and research analysts. They work day and night to fit the funds of clients for providing them the good stocks for long term investment with the minimum risk. All members of the team are well-experienced and well-qualified.
Here we are going to discuss the two most experienced professionals of the company:
Arpit Shah (Investment Director):
Arpit Shah, the founder investment Director has completed Chartered Accountant (CA) and has more than 12 years of experience in the secondary capital market. Presently, he handles the portfolio management and research of Care PMS.
Jayant Mamania (Investment Director):
Mr Jayanta Mamania is an excellent professional of the company who manages the portfolio in such a way that gives an outstanding return to the investors.
His stock-picking ability makes the Care PMS a superior PMS providing company.
Mr Jayanta is the head of the portfolio management team and worked for more than 20 years in the field of equity investment.
Chartered Accountant (CA) is the professional qualification of Mr Jayanta.
Care PMS Strategies Details
Each and every PMS firm has some investment strategy models through which they invest the fund of clients after knowing their investment objective and risk appetite.
But, in the case of Care PMS, things are different from competitors. Care PMS does not have or create any specific Strategy model to invest funds.
In fact, the company invests the fund of a client when it comes in their hand and after searching for the appropriate opportunity at that point of time in the market (according to the client’s need and objective) fund is invested by the experts.
The company works on its own investment approach which is a stock-specific and bottom-up approach.
Now, we will discuss each step that is taken by the company before making an investment decision.
Stock selection criteria:
Care PMS invest in the public listed stocks only. The company does not pick stocks on the basis of market capitalization. If it meets the selection criteria of the company, they go ahead and keep a portion of that equity in the investment portfolio.
The portfolio may contain more than 60% of companies from small market capitalization. But, they would be selected if the company is a dominant player (Segment they operate) in the market.
Stocks are selected on the following criteria:
- Growth potential: The growth prospect includes revenue growth expectation, Historical volume growth, PAT growth expectation, Margin expansion, etc.
- Management Capabilities: Rational and trustworthy team of management, their track record, experience, Corporate governance, depth of domain understanding.
- Strong Financials: Working capital, ROE Trends, high-interest coverage or zero debt, improvement in turnover ratio, dividend payout ratio.
- Valuation: Calculation of the premium paid by the portfolio manager over the intrinsic value of the stock, comparing valuation like P/E ratio, EV/EBITDA, PEG, Replacement cost, DCF, etc.
The investment approach of the portfolio investment is based on Bottom-up and stock-specific stock selection.
Step 1: Selection of companies on an ongoing basis like after quarterly results on some fundamental analysis basis for detail analysis.
Step 2: Comparison between the peers on the basis of detailed fundamental research and analysis basis to get the turnaround in the industry or a particular segment.
Step 3: Check the progress of that segment or industry and select the participants of the industry to confirm inferences.
Step 4: After selection of companies, detailed analysis of the company’s strategies, management capabilities, investor relation, etc. required.
Step 5: Now, the final decision is taken by all the three investment directors to add the company or replace the company.
Investment portfolio structuring:
- The company uses a concentrated portfolio investment strategy.
- There is a limit to the number of stocks or sector weight.
- Diversification of portfolio through value buys, growth prospects, and turnaround stories.
- Portfolio P/E should be lower than the benchmark index.
- Not biased to any particular sector or market capitalization.
Time Horizon of investment:
Generally, the company suggests an investment time horizon of 3 years+, when a client comes to the company to appoint it as his/her portfolio manager. The company always try to invest in those companies which have a time horizon of 10-12 quarters.
There is no lock-in period in the investment strategy of the company.
- Investment strategy offered by the company is: Concentrated
- Top 5 stocks in the portfolio: 53%
- No. of stocks in the portfolio: >20
- Benchmark Index: BSE SmallCap
Care PMS Performance
As there is no model portfolio with the company. It works to provide the best return to the investors through the concentrated portfolio strategy.
This unique idea of the company has given an excellent result to the existing clients of the company. The below-mentioned table shows the performance of the company’s concentrated portfolio from FY2012-13 to FY2018-19.
Year-Wise Return (In percentage):
Hence, we can see the strong performance and portfolio management services returns offered by the Care PMS.
Care PMS Investment plans
Care PMS cares for their valuable investors. The company has created different investment plans for customers on the basis of their financial needs and risk-bearing capacity.
Here are the names of investment plans offered by Care PMS:
- Bronze: In the range of ₹25 Lacs to ₹50 Lacs.
- Silver: In the range of ₹50 Lacs to ₹1 CR.
- Gold: In the range of ₹1 CR to ₹5 CR.
- Platinum: ₹5CR & Above.
So, the above are the different investment plans and investment fund ranges. It starts with the minimum investment amount of ₹25 Lacs and goes above ₹5 CR also.
Depending on an investor’s risk appetite and investment objective they choose one plan which suits them.
Care PMS Commission model
The commission model created by the company is not different from other PMS companies. It also takes the commission for portfolio management on the basis of total transaction volume, the total asset value of the investment portfolio, and the total profit generated through the portfolio.
A percentage is decided by both parties on the above-mentioned basis. The three commission models are:
- Prepaid commission model
- Volume-based commission model
- Profit-sharing based commission model
Prepaid commission model:
In this model of commission, you are required to pay PMS commission in advance without starting the actual portfolio service. Generally, a higher risk is associated with this commission model as the portfolio manager can feel relaxed by getting his commission.
A fixed percentage of the total value of the portfolio is paid by the client to the portfolio manager. The percentage of commission decreases with the increase in the value of the portfolio.
Volume-based commission model:
This commission model is based on the total volume of the transactions completed for the investment portfolio. If the number of transactions completed by the portfolio manager is higher, he will get a higher commission from the investor.
But, it is very important to check the authenticity of the portfolio manager, especially in this commission model. There are various ways known to the portfolio manager to increase the volume of transactions without adding any value to the portfolio.
The percentage slab is created by the company to charge the commission from the client.
Profit-sharing commission model:
The name of the commission model is self-explanatory. It means you are required to pay a certain percentage of commission based on the total profit generated by your investment portfolio.
This model is the best model because you are liable to pay commission only if you get a profit out of your investment portfolio. You will not have to bear the loss of commission as well as loss from the portfolio.
The rule is no profit, no commission to the portfolio manager. And this is also the reason, the portfolio manager gives their best to the invested funds of the clients.
The below-mentioned table shows the percentage of commission charged by the company in a different commission model:
Care PMS Charges
PMS charges some fees for the Portfolio management service provided by the company to the clients. These charges are common among the PMS managers like the management fee, brokerage fee, custodian charge, Entry/Exit load fee etc.
Care PMS stands out from the crowd. There is no Entry/Exit load or fixed fee of the company. The company’s first billing starts after 12 months of Portfolio management service.
The company charges the performance fee at the end of 12 months of investment @15% plus GST of the value appreciation of the portfolio.
In case, the client wants to withdraw the fund before 12 months of investment, the company charges 15% of the value appreciation of the portfolio or 1% of the withdrawal amount, whichever is higher.
Care PMS Benefits
Following are the benefits of portfolio management services of Care PMS as your portfolio manager.
- The First benefit of Care PMS is that the company focuses on a single asset class i.e. Equities. So, full concentration through research is possible.
- The company has only one line of business that is Portfolio management service (PMS).
- The fee structure is very simple and aligned with the investor’s interest.
- The selection of portfolio stocks is done on the basis of fundamental analysis basis only.
- The company focuses on client relationship management.
- The company has a team of dedicated equity professionals (research analysts and portfolio managers).
- Care PMS does not work on the PMS model, but it creates a portfolio when funds made available to them according to the available opportunity in the equity market. It helps to create a portfolio according to the financial goal and risk appetite of an individual client.
Care PMS Customer Support
The prime duty of any organization is to give full support to their clients so that they do not face any inconvenience while dealing with the company.
Care PMS gives Email and call support to the investors so that they can clear their queries if arises related to the portfolio.
A relationship manager is appointed by the company to resolve the problems of clients. They can call the relationship manager to know about the performance or any update of their portfolio.
The clients also get the right to call their portfolio manager directly.
The company is liable to solve any problem of the client within 7-10 working days.
Care PMS Conclusion
Care PMS proofs itself as a different and unique portfolio management service provider. As most companies create portfolio strategies, Care is ready to create the portfolio just after knowing the investment goal and risk appetite of clients.
The company is also different from others as it fully concentrates on only one asset class i.e. equity. The stock selection is done only after the fundamental analysis of stocks by the experts of the company.
The fee structure of the company is also aligned with the investor’s interest.
Overall, we can say that Care PMS is a unique and trustworthy portfolio management service provider.
Thus, in case you are looking for a promising PMS, let us assist you in taking the next steps forward by providing some basic details here:
Care PMS FAQs
Here are some of the most frequently asked questions about Care PMS you must be aware of:
Who is eligible to invest in PMS?
The following can invest in PMS:
- Hindu undivided family (HUF)
- An individual
- Corporate body
- Non-resident Indians
An investor’s fund will be invested in which Asset class?
Care PMS would invest the funds of the investors in Equity shares. Those companies are listed on Indian stock exchanges.
Will the investment be in the client’s name?
Yes, the investment PMS will be in the name of the client. A Demat account and a bank account will be opened separately in the client’s name and all funds will be credited in the bank account and shares will be held in the client’s Demate account.
How an investor can see the value of his/her portfolio?
The company provides a specific user ID and password to each client which can be used to log in to the company’s website to see the performance report of the investment portfolio.
Is there any minimum amount/fund requirement for PMS service?
Yes, as per SEBI Guideline, the minimum fund required for PMS service is Rs.25 Lacs.