Skip to main content

Portfolio Management Service (PMS) – FAQ (Frequently Asked Questions)

What is a PMS?

 

A PMS (Portfolio Management Service) is a service offered to investors wanting to invest in the Indian stock markets on the basis of expert knowledge, research and experience.

 

Who can use a PMS?

 

A PMS service can be used by an investor who wants to invest in the Indian stock
markets and benefit from India's economic growth, but doesn't have the necessary time,
knowledge or experience to do so.

 

How is a PMS different from a Mutual Fund?

 

A PMS is more transparent than a Mutual Fund as the stocks purchased are in your name. The cost structure of the PMS is also more competitive and thus give you the opportunity to make higher returns.

 

Can everyone invest in a PMS?

 

While a Mutual Fund is open to everybody, a PMS is more selective and the minimum amount needed to invest is higher. It is meant for more sophisticated investors looking for exponential returns.

 

What are the types of returns I can expect?

 

Returns vary on the basis of your needs and investment profile. On an average, looking
at India's economic growth, you can expect returns in the range of 45%-55% per year
over the next ten years. The returns depend also on your PMS fund manager and
according to SEBI regulation cannot be guaranteed.

 

What all PMS services are available in India?

 

There are various PMS services available in India such as Kotak Portfolio Management
Services (Kotak Securities) Reliance Portfolio Management Services, ICICI Portfolio
Management Services and FAMS Portfolio Management Services amongst others.

 

How do I choose which PMS to invest in?

 

Invest with someone who philosophy of investing matches your outlook. If you believe in
long term investing on the basis of knowledge, don't invest with a fund manager who
believes in daily trading and speculation.

 

Which PMS has given the best returns?

 

Due to the private nature of the fund management industry, it is difficult to say which is

the best PMS service has given the best and maximum returns.

 

How does the PMS work?

 

A new bank account, DP and trading account are opened in your name and then it is
professionally managed by your PMS Fund Manager. Your PMS fund manager will
have a specific POA (Power of Attorney) to manage this account.

 

Whose names will the stocks be in?

 

Stocks will be in your personal name and not in the name of your PMS manager. All dividends will also be directly credited into your account. Your stocks will be held in Demat form (electronic form) in your name and can be accessed by you at anytime.

 

What about the funds I invest?

 

The funds you invest will be kept in a new bank account opened in your own name.

 

Will I be able to see what stocks are being bought and sold?

 

Yes, the PMS system is completely transparent and you will get to know what is being

done with your funds.

 

Can I access my funds whenever I need them?

 

Yes, you can access your funds anytime you want by giving prior intimation. There is no

lock-in-period.

 

Can I also transfer my existing shares to the new PMS account?

 

Yes, you can transfer your existing shares to your new PMS account and have it

managed professionally.

 

How do performance based fees work?

 

Performance based fees ensure your fund manager is motivated to maximize your

returns. Based on the returns given, performance based fees are charged.

 

Will I get a receipt for the charges?

 

Yes, you shall get a receipt for all charges. The PMS operates under very strict
regulatory norms laid down by SEBI (Securities and Exchange Board of India), BSE
(Bombay Stock Exchange), NSE (National Stock Exchange) and all other regulatory
authorities.

 

Can Non-resident Indian (NRIs) invest in a PMS?

 

Yes, NRIs can invest in a PMS. For that they will need to also open a PIS (Portfolio
Investment Scheme) account, for this permission from RBI(Reserve Bank of India)
needs to be taken. This documentation and permission will be handled by your PMS
manager. The documents can be sent across to anywhere in the world and you don't
need to be present physically in India.

 

-----------------------------------------------------------------

 

Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in L&T Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

Popular posts from this blog

How to Decide your asset allocation with Mutual Funds?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) How to Decide your asset allocation ? The funds that base their equity allocation on market valuation have given stable returns in the past. Pick these if you are a buy-and-forget investor. Small investors are often victims of greed and fear. When markets are rising, greed makes the small investor increase his exposure to stocks. And when stocks crash to low levels, fear makes him redeem his investments. But there are a few funds that avoid this risk by continuously changing the asset mix of their portfolios. Their allocation to equity is not based on the fund manager's outlook for the market, but on its valuations. Our top pick is the Franklin Templeton Dynamic PE Ratio Fund, a fund of funds that divides its corpus between two schemes from the same fund house-the...
Read more

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...
Read more

Benefits Of Repo Rate & CRR Rate Cut On Consumers

  How Reduction In Repo Rate & CRR Affects Customers Finally  RBI announced slashing of repo rate by 25 basis points (bps ) and cash reserve ratio (CRR) by 25 bps which industry experts believe will fuel the economic growth to some extent. Although experts were expecting higher rate cut this year. This lowering of the rate cuts has taken place for the first time in nine months. Now let's see how reducing the repo rate (defined in economic term as the rate at which RBI lends money to the banks) relates to the following individuals and sectors: Banking:   Lowering of repo rate directly reduces borrowing costs of a bank. Banks in turn reduces interest rates on different types of loans such as home, auto, business etc. Similarly trimming down of CRR allows banks to unlock money for lending to the customers i.e. with 0.25 rate cut banks are estimated to lend more than INR. 17 Crores. Consumers:   Lower repo rate does not necessarily benefit existing loan borrowers but new loan se...
Read more

Zero Coupon Bonds or discount bond or deep discount bond

A ZERO-COUPON bond (also called a discount bond or deep discount bond ) is a bond bought at a price lower than its face value with the face value repaid at the time of maturity.   There is no coupon or interim payments, hence the term zero-coupon bond. Investors earn return from the compounded interest all paid at maturity plus the difference between the discounted price of the bond and its par (or redemption) value. In contrast, an investor who has a regular bond receives income from coupon payments, which are usually made semi-annually. The investor also receives the principal or face value of the investment when the bond matures. Zero-coupon bonds may be long or short-term investments.   Long term zero coupon maturity dates typically start at 10 years. The bonds can be held until maturity or sold on secondary bond markets.
Read more

Mutual Fund MIPs can give better returns than Post Office MIS

Post Office MIS vs  Mutual Fund MIPs   Post office Monthly Income Scheme has for long been a favourite with investors who want regular monthly income from their investments. They offer risk free 8.5% returns and are especially preferred by conservative investors, like retirees who need regular monthly income from their investments. However, top performing mutual fund monthly income plans (MIPs) have beaten Post Office Monthly Income Scheme (MIS), in terms of annualized returns over the last 5 years, by investing a small part of the corpus in equities which can give higher returns than fixed income investments. The value proposition of the mutual fund aggressive MIPs is that, the interest from debt investment is supplemented by an additional boost to equity returns. Please see the chart below for five year annualized returns from Post office MIS and top performing mutual fund MIPs, monthly d...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now