One thing consistent about the stock market is change. With the regular happenings across industries in the stock market, managing portfolio investments on your own can take a toll on your mental health (and of course the financial health as well). If you want maximum Portfolio management services returns, you MUST turn to reliable service providers.
They will take care of all your investments, so you can sit back and enjoy the high returns.
But how would you know how to go about it?
In this detailed review, we will give you an idea of the different kinds of returns you may expect and how shall you be taking the next steps in this direction:
Portfolio Management Services Returns Basics
As an investor, all you look for is to equip your portfolio with the best of the investment options in order to get high Portfolio management services returns. To perform this task you can take help of professional portfolio management services, to relieve your stress and enjoy high profits at the same time. With PMS – all the monitoring, research and analysis of the portfolio is done by the service provider.
The investment professional will assist you in achieving your investment goals while working behind the scenes. They will take financial matters in their own hands to ensure you enjoy the soaring source of revenue. But with all said, the discretion to allocate power of decision making to funds manager lies in the hands of investors.
Specialized investment management personnel can be of help to you. The investment professional looks for avenues to reduce investment risk and maximize Portfolio management services returns. To calculate the returns generated by the portfolio, the investment professional makes use of various methods.
Some of these methods are:
Holding period return: Here you calculate returns on investment across different time periods.
Cash flow adjustment: Here you can make use of the internal rate of return to adjust returns against cash flows.
Annual returns: if you are receiving Portfolio management services returns across multiple time periods, it’s better to annualize them for ease of calculation. Annual returns provide an average of money generated from the portfolio each year.
In addition to maximizing returns on the investment, other objectives of PMS include:
Growth of capital invested
Portfolio risk diversification
Plan taxes for high returns
Portfolio Management Services Types
If we talk about PMS types, we have to focus on the four prime types and their respective objectives. All these types have their respective Portfolio management services returns expectations as well.
Let’s dig in!
Active Portfolio Management Service:
In this type of PMS, you have to be at the forefront at all times. The investment professional will look for stocks that have the potential for higher profits in the future. They will purchase stocks at a less price and sell as the price climbs up.
This approach provides higher Portfolio management services returns than the market dictates.
In the active management approach, the focus is on generating returns higher than the market trend. To beat the market, the portfolio managers will take advantage of the market inefficiencies. Thorough research will help the manager to identify and take advantage of market loopholes.
Portfolio management services returns, in this case, are in the range of 12%-15% for a 5-10 years investment horizon.
Here the investment manager will use two approaches for stock selection:
Top-down: In this investment approach, the portfolio managers conduct full market research. On the basis of market analysis, a decision is taken regarding the investment in stocks.
Selection of stocks is done on the basis of the expected performance of industries and sectors in the current economic period.
Bottom-up: Here the investment decision is taken keeping the market fluctuations and expected trends constant. The portfolio manager will select the stocks of the companies that have strong products, growth, and stable financial statements.
The basis of this approach is that strong companies perform better irrespective of market trends.
Passive Portfolio Management Service
Unlike the active portfolio management strategy, this approach relies on the basis of stock market ground rules. Here the portfolio manager believes that if the low-cost investments are kept for a long time they will generate high returns.
Here the portfolio manager goes for the following types of stock selection:
Efficient market theory
The portfolio management services returns fall in the range of 10%-12% for a 5-10 years investment horizon.
Discretionary Portfolio Management Service
Here the entire responsibility lies in the hand of the investment manager. As an investor, you only have to provide the amount to be invested, your objectives and the time period.
The investment manager will take the decision regarding the selection and investment of funds on his own.
This PMS type provides returns in the range of 8% to 25% for 5-10 years investment period, depending upon the PMS provider.
Non-Discretionary Portfolio Management Service
Here the portfolio manager only acts as a financial counsellor. As an investor you will only receive suggestions from the investment manager about different investment avenues, the decision lies in your hand whether to go for them or not.
This type can provide you with a return of 7%-12% for 5-10 years duration.
To get the maximum Portfolio management services returns, choose the investment manager that never compromises with your investment objectives and returns expectations.
Portfolio Management Services Returns Range
The kind of Portfolio Management Services returns you get, also depends on the timelines i.e. the investment horizon or the holding period of your investment.
For instance, Motilal Oswal PMS provides returns in the range of 13% for 3 years and goes as high as 25% if your investment period is more than 10 years.
Similarly, Accuracap PMS provides returns as high as 16% for 3 years and drops to 14% for any investment exceeding 10 years horizon.
In a sense, none of the single factors decides the Portfolio Management Services returns – it is always a combination of PMS type, PMS provider and time period of the investment.
In case you are interested in using Portfolio management services, let us assist you in getting the best of returns from your investments.
Just fill in some basic details and we will get the process started for you: