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Portfolio Management Services

Understanding Portfolio Management Services (PMS): A Comprehensive Guide for Athworth Wealth Customers

Portfolio Management Services (PMS) is a professional, customized investment service oered to high-net-worth individuals (HNIs), institutions, and sophisticated investors seeking tailored wealth management solutions. Unlike mutual funds, which pool money from multiple investors, PMS oers personalized portfolio management, where a dedicated fund manager builds and manages a bespoke investment portfolio based on an individual’s financial goals, risk appetite, and investment horizon. Athworth Wealth is committed to delivering exceptional PMS solutions, ensuring that your investments are strategically aligned with your aspirations.

This guide provides a detailed overview of PMS, its types, benefits, and how Athworth Wealth can help you select the most suitable PMS strategy to meet your financial objectives.

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Portfolio Management Services (PMS)

Build your legacy with Athworth Wealth’s PMS expertise

What is Portfolio Management Services (PMS)?

PMS is a premium investment service where a professional portfolio manager manages your investments in a customized portfolio of securities, such as equities, bonds, mutual funds, real estate investment trusts (REITs), or other assets. The portfolio is designed to align with your specific financial goals, risk tolerance, and tax considerations. PMS is regulated by the Securities and Exchange Board of India (SEBI) and typically requires a minimum investment of ₹50 lakh, making it suitable for HNIs and investors with significant capital.

Key Features of PMS

  • Customization: Portfolios are tailored to your unique financial goals, risk profile, and preferences, unlike the standardized approach of mutual funds.
  • Professional Management: Experienced fund managers actively manage your portfolio, making decisions based on in-depth market research and analysis.
  • Direct Ownership: Investors directly own the securities in their portfolio, providing transparency and control.
  • Flexibility: Portfolio managers can quickly adapt to market changes or your evolving financial needs.
  • Higher Investment Threshold: SEBI mandates a minimum investment of ₹50 lakh, ensuring PMS caters to serious investors.
  • Tax Efficiency: PMS allows for tax optimization through strategies like tax-loss harvesting and holding securities for long-term capital gains.

How PMS Works

  1. You sign an agreement with a PMS provider, such as Athworth Wealth, granting the portfolio manager authority to manage your investments.
  2. The manager conducts a detailed assessment of your financial goals, risk tolerance, and investment horizon.
  3. A customized portfolio is created, consisting of equities, bonds, or other assets, based on your preferences.
  4. The portfolio is actively monitored and rebalanced to optimize returns and manage risks.
  5. You receive regular performance reports, tax statements, and updates on your portfolio’s holdings.
  6. Returns are generated through capital appreciation, dividends, or interest, subject to market risks and taxation.

Athworth Wealth’s PMS offerings are designed to maximize wealth creation while providing personalized attention and strategic investment solutions tailored to your needs.

Types of Portfolio Management Services

PMS can be categorized based on management style, investment approach, and asset allocation. Below is a detailed breakdown of the types of PMS, along with their suitability for different investor profiles.

1. Based on Management Style

  • Discretionary PMS: The portfolio manager has full authority to make investment decisions on your behalf, based on the agreed strategy. You are not involved in day-to-day decisions. Ideal for investors who prefer a hands-off approach and trust the expertise of the portfolio manager.
  • Non-Discretionary PMS: The portfolio manager provides investment recommendations, but you make the final decisions on buying or selling securities. Best for investors who want to retain control while benefiting from professional advice.
  • Advisory PMS: The portfolio manager offers advice and recommendations, but you execute all trades independently. Suitable for experienced investors wanting guidance but full control.

2. Based on Investment Approach

  • Equity PMS: Focuses on investing in stocks to achieve capital appreciation. Sub-categories: large-cap focused (stable companies), mid/small-cap focused (higher growth potential, more risk), thematic/sectoral (focus on specific sectors or themes).
  • Debt PMS: Invests in fixed-income securities like corporate bonds, government securities, or debentures to generate stable returns and preserve capital.
  • Hybrid PMS: Combines equities, debt, and other assets to balance growth and stability. Allocation customized based on your risk profile.
  • Multi-Asset PMS: Invests across multiple asset classes including equities, debt, real estate, commodities, or international securities for diversification.

3. Based on Investment Strategy

  • Value Investing: Focus on undervalued stocks with strong fundamentals, aiming for long-term growth.
  • Growth Investing: Target companies with high growth potential, accepting higher volatility.
  • Dividend Yield Strategy: Invest in stocks or securities offering regular dividends for income.
  • Thematic/Sectoral Strategy: Focus on specific sectors (e.g., technology, green energy) expected to outperform.

Choosing the Right PMS: Matching Customer Requirements

Selecting the right PMS depends on your financial goals, risk tolerance, investment horizon, and net worth. Athworth Wealth’s personalized PMS solutions ensure your portfolio is tailored to your unique needs.

1. High-Net-Worth Individuals (HNIs) (Net Worth: ₹2 Crore+)

Profile: High risk tolerance, long-term horizon (7–15+ years).
Goals: Capital appreciation, global diversification, legacy planning.
Recommended PMS: Equity PMS (large-cap or multi-cap), multi-asset PMS, thematic PMS.

2. Senior Professionals or Entrepreneurs (Age: 35–50)

Profile: Moderate to high risk tolerance, medium- to long-term horizon (5–10 years).
Goals: Retirement planning, children’s education, business expansion.
Recommended PMS: Hybrid PMS, non-discretionary PMS, value investing PMS.

3. Retirees or Pre-Retirees (Age: 50–65+)

Profile: Low to moderate risk tolerance, short- to medium-term horizon (1–7 years).
Goals: Regular income, capital preservation, legacy planning.
Recommended PMS: Debt PMS, dividend yield PMS, conservative hybrid PMS.

4. Tax-Conscious Investors

Profile: Seeking tax-efficient strategies alongside wealth creation or income.

Financial Goals: Minimize tax liability while growing wealth.

Recommended PMS:

  • Equity PMS: Long-term holdings qualify for lower capital gains tax (10% on LTCG above ₹1 lakh).
  • Debt PMS: Benefits from indexation for long-term holdings (20% tax with indexation).
  • Tax-Loss Harvesting: Actively managing losses to offset gains.

Athworth Wealth Support: We integrate tax-efficient strategies into your PMS portfolio, optimizing after-tax returns.

5. Active Investors

Profile: High risk tolerance, enjoys involvement in investment decisions, seeking high returns.

Financial Goals: Capital appreciation through active market participation.

Recommended PMS:

  • Non-Discretionary PMS: Allows you to approve trades while leveraging expert advice.
  • Thematic/Sectoral PMS: For targeted investments in high-growth sectors.

Athworth Wealth Support: We provide real-time market insights and recommendations to support your active investment approach.

How to Invest in PMS with Athworth Wealth

  1. Initial Consultation: Meet with our advisors to discuss your financial goals, risk profile, and investment preferences. Complete a risk assessment to determine the best PMS strategy.
  2. KYC & Documentation: Submit identity proof, address proof, and financial documents as per SEBI regulations. Sign the PMS agreement, specifying discretionary or non-discretionary management.
  3. Portfolio Creation: Our portfolio managers design a customized portfolio based on your goals and risk appetite. Choose from equity, debt, hybrid, or multi-asset strategies.
  4. Investment Execution: Invest a minimum of ₹50 lakh (SEBI requirement) via a lump sum or phased contributions. The portfolio manager executes trades as per the agreed strategy.
  5. Monitoring & Reporting: Receive regular performance reports, tax statements, and portfolio updates. Our managers actively monitor and rebalance your portfolio to optimize returns.
  6. Tax and Estate Planning: We integrate tax-efficient strategies and align your portfolio with estate planning goals.

Why Choose Athworth Wealth for PMS?

  • Bespoke Portfolios: Fully customized to your financial goals and risk profile.
  • Expert Fund Managers: Seasoned professionals with a proven track record in wealth management.
  • Transparency: Detailed reporting on holdings, performance, and fees.
  • Holistic Wealth Management: Integration of PMS with mutual funds, AIFs, and tax planning for comprehensive financial solutions.
  • Client-Centric Service: Positive client testimonials highlight our dedication to your financial success.
  • Proactive Risk Management: Dynamic portfolio adjustments to navigate market volatility.

Key Considerations Before Investing in PMS

  • Higher Costs: PMS typically has higher fees (1–2% management fee + performance-based fees) compared to mutual funds. Ensure the returns justify the costs.
  • Minimum Investment: The ₹50 lakh threshold makes PMS suitable for HNIs.
  • Risk and Volatility: Equity-focused PMS carries market risks, while debt PMS is sensitive to interest rate changes.
  • Tax Implications:
    • Equity PMS: Long-term capital gains (LTCG) above ₹1 lakh taxed at 10% (held >1 year).
    • Debt PMS: LTCG (held >3 years) taxed at 20% with indexation; short-term gains taxed as per income slab.
  • Liquidity: PMS investments are generally liquid, but certain strategies (e.g., thematic) may involve less liquid assets.
  • Manager Track Record: Research the fund manager’s performance history and expertise.

PMS vs Mutual Funds: A Comparison

Parameter PMS Mutual Funds
Minimum Investment ₹50 lakh ₹500 (via SIP)
Customization Highly customized Standardized
Management Style Discretionary / Non-discretionary / Advisory Pooled investment, no individual control
Ownership Direct ownership of securities Units of the fund
Fees Higher (1–2% + performance fees) Lower (0.5–2% expense ratio)
Risk Varies (high for equity, low for debt) Varies based on fund type
Suitability HNIs, sophisticated investors Retail investors, beginners

Conclusion

Portfolio Management Services (PMS) offer a sophisticated, customized approach to wealth creation, making them an excellent choice for high-net-worth individuals seeking tailored investment solutions.

Whether you aim for aggressive growth, stable income, or diversified wealth preservation, Athworth Wealth’s PMS offerings are designed to deliver superior results. Our expert portfolio managers, transparent processes, and client-centric approach ensure your investments align with your financial aspirations.

To explore how PMS can enhance your wealth, schedule a consultation with Athworth Wealth today. Visit saddlebrown-snail-192033.hostingersite.com or contact us to discover personalized investment strategies tailored to your needs.

Build your legacy with Athworth Wealth’s PMS expertise!