Portfolio Management Services is used by high net worth investors to invest in stocks. While there are products that also bet on fixed income instruments, most are equity-linked. Portfolio Management Services account is an investment portfolio in Stocks, Debt and fixed income products managed by a professional money manager, that can potentially be tailored to meet specific investment objectives
1. How does PMS work?
It is offered by brokerages and mutual funds registered with Sebi. There are two types of PMS: Discretionary and Non Discretionary. In discretionary, the fund manager takes investment decisions on behalf of the investor. In non-discretionary, the fund manager suggests investment ideas, while the decision is taken by the client.
2. Is PMS similar to a mutual fund?
The biggest similarly between PMS (discretionary) and mutual funds is that the manager handles the money on the behalf of the clients. But, the key difference is that investors in MF get units that represent stocks. In a PMS, the investor holds the stock in a demat account owned by him, but the fund manager has the power of attorney to operate it.
3. Is there a minimum investment amount for PMS?
Investors need to bring in atleast Rs 25 lakh to invest in a PMS. Alternatively, they can give shares worth Rs 25 lakhs to the fund manager.