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What is PMS marketplace? How PMS benefits the Investors?

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PMS stands for Portfolio Management Service, which is a professional service provided by qualified and experienced portfolio managers, supported by an experienced research team, who manage stock portfolios on behalf of customers rather than clients managing their own.

 

PMS is designed to operate with your unique investing plan. Whether you're saving for retirement or trying to build and safeguard your money, we can help. PMS is one of the most advanced types of investments offered to HNIs or High Net-worth Individuals or NRIs.

Stocks, commodities, fixed income, structured products, real estate, and cash can all be part of your portfolio. According to SEBI requirements, a minimum investment of Rs 50 Lakhs is required for a portfolio management service. PMS offers extensive communication and performance reporting to investors, as well as constant monitoring, resulting in improved returns.

The cost of a PMS are higher than those of mutual funds, but this is due to the greater flexibility available in PMS vs mutual funds, which typically provide you with a blanket portfolio constructed at a macro level.

What are the benefits of PMS offers to Investors?

1. Professional Management

1. Professional Management

Professional management offered under the PMS is its biggest plus point. It offers portfolio management by skilled and licenced portfolio managers that strive to provide consistent long-term performance through greater returns and lower risk. The service manages portfolios professionally with the goal of producing consistent long-term performance while minimising risk.

2. Independent Portfolio
 

2. Independent Portfolio

PMS Holdings is self-contained and so unaffected by the actions of other investors. Whereas, Mutual funds that are managed and kept as a pool may be subject to the whims of hundreds of thousands of investors at any given moment. Investors, on average, prefer to invest in rising markets or increase fund performance, while there may be panic in fast dropping markets or bad fund performance.

In the case of PMS, each individual determines his purchasing or selling time and price, with no bearing on other investors' holdings or experiences. PMS has separated individual assets so that one investor's actions do not affect the investments of other investors.

3. Diversity

3. Diversity

One of the most significant advantages of PMS over mutual funds is that it provides a considerably wider range of diversity. Mutual funds, for example, have far too many limits on the asset types they can invest in, diverting from their fundamental mutual fund purpose. PMS is much more adaptable.

Real estate trusts, gold ETFs (Exchange Traded Funds), overseas assets, structured products, commodities, and other products are available to investors. These not only boost profits but also a lower risks because many of them have a low correlation with stocks.

4. Transparent Holdings

4. Transparent Holdings

All funds are expected to give a continual transparent disclosure of all transactions, fees, and portfolios to their clients under the regulations of SEBI for PMS. On a regular basis, the portfolio value must be benchmarked to market prices, and investors must be able to monitor the outperformance or underperformance over time. The PMS must also provide portfolio performance against a variety of relevant benchmarks so that investors may make informed decisions in each circumstance.

5. Risk Control

5. Risk Control

The benefit of PMS is that it develops a custom portfolio for you based on your specific needs and risk tolerance. These portfolio managers are supported by research teams that are in charge of developing the client's investment plan as well as supplying real-time data and information to back it up. PMS firms are also experts at counselling customers on how to diversify their portfolios effectively while lowering risk. It is insufficient to rely just on research.

Story first published: Monday, December 6, 2021, 22:21 [IST]
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