Apart from cash, the client can also hand over an existing portfolio of stocks, bonds or mutual funds to a Portfolio Manager that could be revamped to suit his profile. However, the Portfolio Manager may at his own sole discretion sell the said existing securities in favour of fresh investments.
Portfolio Management Services (PMS) is a service offered by a Portfolio Manager that involves managing an investment portfolio in stocks, fixed income, debt, cash, structured products, and other individual securities. The portfolio is managed by a professional Portfolio Manager, and it can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities, unlike a mutual fund investor who owns units of the fund. You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals. Although portfolio managers may oversee hundreds of portfolios, your account may be unique.
There are three types of PMS: Discretionary, Non-Discretionary, and Advisory.Discretionary :
Under these services, the choice, as well as the timings of the investment decisions, rest solely with the Portfolio Manager.Non Discretionary :
Under these services, the portfolio manager only suggests the investment ideas. The choice, as well as the timings of the investment decisions, rest solely with the investor. However, the execution of trade is done by the portfolio manager.Advisory :
Under these services, the portfolio manager only suggests the investment ideas. The choice, as well as the execution of the investment decisions, rests solely with the Investor.
Green Lantern Capital offers only Discretionary PMS Services
The investment solutions provided by PMS cater to a niche segment of clients. The offerings are usually ideal for investors who are looking to invest in asset classes like equity, fixed income, structured products, desire personalized investment solutions, desire long-term wealth creation, and appreciate a high level of service. These clients can be individuals or institutional entities with high net worth.
The tax liability of a PMS investor would remain the same as if the investor is accessing the capital market directly. However, the investor should consult his tax advisor for the same. The Portfolio Manager ideally provides an audited statement of accounts at the end of the financial year to aid the investor in assessing his/ her tax liabilities.
The service provides professional management of portfolios intending to deliver consistent long-term performance while controlling risk.Continuous Monitoring :
It is important to recognize that portfolios need to be constantly monitored and periodic changes made to optimise the results.Risk Control :
A research team responsible for establishing the client’s investment strategy and providing the PMS provider real-time information to support it, backs any firm’s portfolio managers.Hassle Free Operation :
The Portfolio Management Service provider gives the client a customised service. The company takes care of all the administrative aspects of the client’s portfolio with periodic reporting (usually daily) on the overall status of the portfolio and performance.Flexibility :
The Portfolio Manager has a fair amount of flexibility in terms of holding cash (can go up to 100% also depending on the market conditions). He can create a reasonable concentration in the investor portfolios by investing disproportionate amounts in favour of compelling opportunities.Transparency :
PMS provides comprehensive communications and performance reporting. Investors will get regular statements and updates from the firm. Web-enabled access will ensure that client is just a click away from all information relating to his investment. Your account statements will give you a complete picture of which individual securities you hold, as well as the number of shares you own. It will also usually provide:
- the current value of the securities you own
- the cost basis of each security
- details of account activity (such as purchases, sales and dividends paid out or reinvested)
- your portfolio’s asset allocation
- your portfolio’s performance in comparison to a benchmark
- market commentary from your Portfolio Manager
PMS gives select clients the benefit of tailor-made investment advice designed to achieve their financial objectives. It can be structured to automatically exclude investments you may own in another account or investments you would prefer not to own. For example, if you are a long-term employee in a company and you have acquired concentrated stock positions over the years and have become over-exposed to a few company’s stock, a separately managed account provides you with the ability to exclude that stock from your portfolio.
Individuals (Residents and Non Residents Indians), HUFs, Sole Proprietorship Firms and Trusts and corporates like Partnership Firms, Limited Liability Partnerships, and any other Corporate Body can invest in PMS.
Non Resident Indians (NRIs) can invest in PMS through NRE or NRO accounts. NRE is an account in India for NRIs to park their foreign earnings, whereas NRO is an account in India to manage the income earned by the person in India. Some additional documents are required for NRIs investing in PMS, but all this is easily managed and handled by our relationship managers
Yes. All investments involve a certain amount of risk, including the possible erosion of the principal amount invested, which varies depending on the security selected. For example, investments in small and mid-sized companies tend to involve more risk than investments in larger companies.
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