Is PMS Investment The Right Way To Invest For You?

Is PMS Investment The Right Way To Invest For You?

Portfolio Management Service or PMS investment has become significantly popular among investors in recent times and for all the right reasons!

But, an ever-growing fan base is not an indicator of its suitability to your investment intent. That being said, there are several ways to determine whether this investment avenue is the right match for you! 

On that note, let us jump right into the heart of the topic to uncover the answer you are looking for!

The ABCs of Portfolio Management Services

It is a customised professional service offered exclusively to a niche category of investors. PMS providers tend to park money by devising focused investment portfolios, which may include – debt, cash, stocks, structured products, fixed-income instruments, and individuals securities.  

The USP of this investment avenue is that it extends higher returns and more flexibility to investors. Most investors consider PMS investment to be a lucrative means of parking a sizable sum of money. 

Note that when you invest in PMS, you gain ownership of individual securities, which is quite different from how mutual fund investors own their fund units. Portfolio management service uses a separate DEMAT account and a bank account for each of its clients.

You can connect with service providers via online platforms like KredX. It features a wide range of PMS provider options alongside digital gold and bonds

Regardless, to resolve the query, “Whether PMS investment is the right choice for me or not?” make sure to glance through the following section!

Reasons To Choose PMS Investment 

These top 5 reasons walk us through why investors choose to park money in Portfolio management services in the first place. 

  • Tailor-Made Investment Portfolio 

When you invest in PMS, you can expect to receive tailored advice on creating a portfolio that’s designed per your requirements. This sets PMS apart from other investment avenues like mutual funds. You can enjoy expert advice that helps meet immediate or delayed investment plans. 

  • Superior Returns

The unique structure and approach to investment in PMS enable portfolio managers to make concentrated calls on high-conviction stock picks. In fact, a fund manager does not need to account for multiple operational and regulatory constraints that are common in mutual fund profiles. 

As a result, they enjoy greater flexibility to capitalise on current market trends concerned with nascent companies. It also allows them the liberty to hold onto stocks that manifest better growth prospects down the road. Such flexibility proves effective in generating higher returns. Then again, as an investor, you should note that superior or aggressive returns could also expose you to high-risk levels. 

  • Proactive Management

SEBI has issued specific mandates for PMS fund managers in terms of experience. As a result, PMS investment is backed by qualified portfolio managers and an experienced research team. Investors who need reliable and effective investment-related advice can avail the same as and when required by selecting managers via platforms like KredX. 

  • Effective Risk Management

As a PMS investor, you can expect tailored and effective investment strategies. In most cases, the concerned management team weighs an individual’s investment goal, risk appetite, income requirements and market trends to formulate suitable risk management strategies. Such professional advice and risk management strategies help cushion investment risks more effectively, even in changing market situations.  

  • Transparency In Dealing 

Investors are more likely to receive timely performance reports from their PMS investment managers. Regular updates and comprehensive statements facilitate transparency in dealing. It helps investors who are relatively new to PMS to keep up with the developments and adjustments. 

Bottom line

PMS investment is still very nascent in India, which often raises concerns among conservative investors. However, with the existence of investment platforms like KredX, people who are interested in parking money into this option can put their worries to rest. Such a platform serves as a marketplace for PMS providers and helps investors connect with the best in the business.