Portfolio Management Service or PMS is a highly customized investment service in which portfolio managers aided by detailed research, manage equity investment portfolios on high net worth individuals. The objective of the PMS investment is to deliver long-term returns consistently while limiting the downside. As per SEBI norms the minimum ticket size of a PMS investment is 50 lakhs.
The world of equity investing is very complex due to the huge volatility associated with it. Years of gains can be often wiped out with a single investment mistake. Hence when the stakes are high in the form of high investible surplus, it makes sense for high net worth individuals to opt for the best PMS in India rather than experimenting with do-it-yourself investing.
Key factors to keep in mind while choosing the best PMS in India:
Sebi registration
Market regulator, SEBI has made it mandatory for PMS providers to be registered with the apex body. Hence it is important to check if the PMS provider is registered with SEBI before you take your second step. As SEBI registered PMS providers work under the strict framework of SEBI guidelines, there will be less chances of the PMS providers taking investors for a ride or following unethical practices
History of the PMS provider
PMS is not an easy business. Hence any PMS provider who is not performing well may not be able to sustain for long in the market. While choosing the best PMS in India to invest your hard-earned money, it would be highly advisable to opt for one that has been in business from a long time and is well-established.
Past returns generated by the PMS
Investments in stock markets are subject to high volatility due to numerous factors involved. Hence, past performance of any investment service can never be considered as a guarantee for repeat of the same in future. However, it can help you to understand whether the PMS service has been able to generate wealth for investors consistently. You can also compare the past performance of the PMS vis-à-vis the performance of benchmark indices. For example if the PMS has delivered a CAGR of 30% over a 5 year period compared to the Nifty 50 which has delivered a CAGR of 20%, the PMS is definitely a consistent and high performer.
PMS theme and approach
There are hundreds of PMS services in the market. To choose the best PMS in India, you should check for the investment theme and approach used by the PMS. This is important to understand this to know how the PMS is different from others in the market. The PMS should clearly define the long-term objectives of choosing a specific investment theme and approach.
Risk management strategies used by the PMS
Equity investments are subject to market risks due to continuous fluctuations. Adequate risk management strategies can help in reducing the risk to a certain extent. Hence it is advisable to check the risk management strategies used by the PMS beforehand. Ideally there should not be an exposure of beyond a certain limit in any stock or sector at investment cost levels. Portfolio diversification can help in avoiding concentration risk. A staggered approach for investment and rebalancing when required is also equally important.
Customer service
It is important for the PMS provider to be easily accessible for answering all your queries. Any service which aims to be the best PMS in India should provide multiple channels of communications such as email/phone/chat support etc. Also the turnaround time for reverting to customer queries should be clearly specified.
Charges of the PMS
PMS services can charge either a fixed amount as a fee or performance-based fee or a combination of the two. Before choosing the best PMS in India, it is important to check the amount and the type of fees charged by the PMS for each activity.
How Bonanza Portfolio can help you ace the wealth creation journey?
Bonanza Portfolio is a SEBI-registered financial advisory service with over 1700 outlets and service in over 500 cities across India and the UAE. Established in 1994, Bonanza ranks as one of the most trustworthy names in financial services space in India. Together with 5 mega group companies in its fold, Bonanza is the fastest growing financial service in the country today.
Since inception, Bonanza Portfolio has been instrumental in helping thousands of investors to achieve their financial goals.
Check out the outstanding past performance of Bonanza Portfolio below:
* For the period ended 30th Nov 2021
*For the period ended 30th Nov 2021
Sounds interesting? Click here to get start investing now.
Bonanza Portfolio’s Investment Strategies at a glance:
PMS Growth
- Investment into emerging leaders with consistent track record and with focus on companies having excellent fundamentals for more than 5 -10 years
- Mostly allocation across small and mid-cap stocks
- Use of top-down as well as bottom-up approach
- Focus on primarily growth aspect – ROE/ ROCE/ Profit ratios
PMS Value
- Investment in hand-picked companies with excellent track record and growth prospects
- Major allocations is across large cap and mid cap stocks that meets Bonanza Portfolio’s fundamental and technical research criteria
- After initial screening, the final stock selection is done using growth triggers from Bonanza’s proprietary screener
- Mostly top-down approach
Apart from outstanding returns through professional portfolio management, Bonanza Portfolio offers many other benefits to investors such as:
- Monthly reports
- 24×7 online view of portfolio
- 100% transparency
- Audited tax reports at the end of financial year
- Monthly newsletter
- 24×7 end to end support
- Prominent business updates
Risk management strategies employed by Bonanza Portfolio
Concentration risk
- Investment of not more than 10% in any stock
- Exposure of not more than 25% in any sector at cost level
- Diversified portfolio consisting of 15+ stocks to minimize risk
Drawdown
- Mostly staggered approach used for investment
- Investment committee revalidates if any stock falls more than 30% from its average purchase price
Governance
- Review of stocks and revalidation of conviction on ideas on quarterly basis
- Promoter track/reputation records, Third party transactions
To start investing with the best PMS in India click here.
– Written and contributed by Pradeep Sukumaran.
