Portfolio Management Services

PMS is a professional investment service offered by SEBI-registered portfolio managers. They manage a client’s portfolio of stocks, bonds, and other securities on behalf of the investor, tailoring it to specific goals and risk appetite.

Types of PMS

Discretionary PMS

Portfolio manager takes all buy/sell decisions independently.

Non-Discretionary PMS

Manager suggests investments, but the client makes the final call.

Advisory PMS

Manager only advises; execution is done by the client.

Minimum Investment

SEBI mandates a minimum ₹50 lakh investment for PMS accounts in India.

Key Features

Customized Portfolios

Unlike mutual funds, PMS portfolios are tailored to individual client needs.

Transparency

Investors can see exact holdings in their Demat account.

Flexibility

No restriction on portfolio composition; managers can hold concentrated positions.

Professional Management

Managed by experienced fund managers with research support.

Fee Structure

Fixed Fee

Flat annual management fee (e.g., 2% of assets).

Performance Fee

Charged if returns exceed a benchmark (e.g., 20% of profits above hurdle rate).

Often a hybrid model combining both.

Advantages

Risks & Considerations

PMS vs. Mutual Funds (Quick Comparison)

Aspect

PMS

Mutual Funds

Minimum Investment

₹50 lakh

₹500–₹5,000

Portfolio

Customized, client-specific

Common pool for all investors

Transparency

Direct holdings in Demat

Units in fund NAV

Fees

Higher (fixed + performance)

Lower (expense ratio)

Risk

Higher (concentrated bets)

Diversified, relatively lower