Portfolio Management Services has seen an accelerated growth in the investment arena, registering 18% CAGR from 2014 to 2019 and Asset Under Management shooting from Rs 6.04 lakh crores to Rs 13.70 lakh crores.
The need to generate robust alpha has played a crucial role in fuelling investor’s inclination towards this investment avenue.
However, the reason to invest in PMS is not limited to alpha generation only. Other essential factors such as professional and curated financial advice in framing investment strategies make PMS an increasingly popular investment vehicle.
Continue reading to know the reasons to invest in Portfolio Management Services!
Here Is Why You Should Invest In Portfolio Management Services
1. Personalised Investment Options
PMS offers personalised investment solutions to cater to the investment objectives of varied clients. Service providers feature various portfolios, including large-cap, mid-cap, multi-cap, and small, among others, wherein investors can select as per their risk appetite. Likewise, some PMS extend standardised products, while others offer tailor-made investment options aligning with the client’s investment goals.
The opportunity to hold a sizable stake in a company makes PMS investment a distinguished tool from mutual funds. Here, a portfolio manager devises investment strategies and trading timings based on the requirements of an individual investor and executes those accordingly (depending on the type of PMS selected).
2. Robust Risk Management Plan
Portfolio Management Services is not restricted to conducting market researches and providing timely recommendation only. It also involves a robust risk management plan wherein portfolio managers thoroughly track the diversification, assess the market, interest rate, and inflation risks.
Since the investment market is characterised by constant fluctuations, keeping track or monitoring these aspects help them to make the right investment decision during bullish and bearish spells. Also, regular market research enables portfolio managers to safeguard investor’s holdings. Hence, this helps PMS providers minimise the risk and maximise returns in varied market situations.
3. Superlative Returns
PMS investment is associated with constant customisations as per dynamic situations. Hence, it generates excellent returns than other investment options like mutual funds. Researchers work in unison with a portfolio manager to analyse the financial market and existing trends. They also track an investor’s portfolio to make knowledgeable (entry/exit) decisions and guarantee returns in odd market conditions.
4. SEBI Regulated
Portfolio Management Service is a versatile investment avenue that works in a legally bound investor-fund manager environment. The Securities and Exchange Board of India (SEBI) offers strict regulations for PMS managers and Asset Management Companies (AMC) regarding the required experience and rules of running an AMC. Thus, the regulatory aspects of PMS investmentmake it a haven for investors.
In Portfolio Management Services,every investor is informed about every transaction. The investment avenue also features a transparent fee structure. As investment in PMS works under a legal framework, portfolio managers are bound to intimate every transaction and the related charges to an investor. Moreover, investors get a monthly statement with all the details, making it easier for investors to track their outlays seamlessly.
Navigating the investment market can be demanding, with continually fluctuating conditions necessitating a constant change in strategies. To function under such conditions, investment procedure requires expert guidance. Portfolio Management Services allows an investor to generate alpha in relation to benchmark indices. Although it is an essential factor, intending investors must evaluate other aspects to ensure their objectives match the offerings of PMS.