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How to select the best Portfolio Management services in India


In our last article here, we had explored Portfolio Management Services in detail. We had understood what portfolio management services are and how exactly they are useful to the average investor as an alternate investment avenue. So once we have understood what PMS is and want to start investing via PMS, the next logical step is to understand how to go about selecting the right PMS for ourselves. This article will help you understand how to select the best portfolio management service in India.

I want to invest in PMS. How I proceed?

As one would have already realised, PMS helps achieve better returns as compared to mutual funds. Since the PMS have less regulatory compliance than mutual funds, one must do one’s research before finalising the best portfolio management service. However, before evening going in that direction, the first thing that one needs to change and understand that investing via a PMS is generally a more involved exercise. One needs to understand the basics of the investing and one’s expectation of returns should be rooted in the experience of real world performances. Also, since any good PMS will send you investment letters and periodic updates on the performance of their schemes, it helps if one is also able to make sense of all that literature. Again, any good PMS will also have good customer communication, one can make use of this opportunity to understand the fund managers’ rationale on some of their investments and their views on what does the future hold.

OK, I understand. I feel I am ready. What next?

The basics investment amount required for investing in a mutual fund is Rs. 50 lakhs which looks to be prohibitively high for a country like India where the average per capita income was Rs.1.26 lakhs only in 2021[1]. It can be understandably high for a lot of investors. For some investors, this could be their entire savings for some others this amount would constitute a lion’s share of their savings. So investing this huge an amount at one go would understandably be quite intimidating. One needs to understand how their money should be invested. There are PMS that will invest in less risky instruments like debt funds, gold etc. So one needs to have some clarity on what is the amount of equity risk that one is comfortable with and what part of their investment amount they want to invest in less risky instruments.

What should I look for when I select the best Portfolio Management services in India?

Though people usually start with the basics of understanding what is the performance of the PMS across their schemes and over different periods of time, it is more important to understand the core investing philosophy of the fund manager. It is important to understand this because past performance may or may not be repeated in the future. One needs to understand that they fund manager has a proven process in place that generates consistent returns over a period of time. This is especially true considering the past two years where a lot of funds have got good returns by taking more risks. One needs a clear understanding of which kind of stocks will the fund manager invest in, what are the kind of research that they do and when they enter and exit a stock. This kind of understanding of the fund manager goes a long way in helping one get comfortable to invest this huge amount of corpus using PMS.

Is there a checklist that can help me select the best Portfolio Management services in India?

Yes. A basic checklist that any decent PMS would fulfil is as follows:

  1. They have a completely online process that ensures that you can invest from the comfort of your home whenever and wherever possible.
  2. They have good periodic newsletters and communication mails sent to clients apprising them of their performance and their plans for the future.
  3. They have branches in your city so that in case you are a bit old fashioned and would like face to face interaction rather than investing online.
  4. They have good customer services representatives who help soothe your nerves when the market falls; this is very important for a new investor as emotional handholding during a crisis is one of the most important after sales service that separates the experienced and amateur service providers.
  5. Is PMS one of the main business of the firm or is it a side business. There are some stock brokers who provide PMS but their main goal of getting clients to trade more than invest clashes with the goals of investors. It is a good idea to avoid them is possible.
  6. One more critical feature that might not seem too important initially but adds huge value is the different types of instruments that you can invest through them. What could start as a complete equity portfolio could morph into an equity + debt and even some alternate investments like gold and silver. Generally this is linked with the investor’s stage in life and their priorities and goals going ahead; a person nearing retirement would want to allocate a higher portion of their investment to debt instruments, especially if this is supposed to be their retirement fund.

Is that all?

Yes. Our near to two decades of experience in the financial industry (advisory + PMS) has helped us consolidate our understanding of not only customer requirements but also their pain points. This blog is a medium to help guide the retail investors and help them achieve their financial goals. It is a result of this understanding only that our services not only provide an opportunity to invest in stocks but also cater to a wide variety of options like debt instruments, gold etc. Since we started with financial advisory services, we are uniquely positioned to understand the customer’s current stage in life, their investment objectives and the most suitable allocation of their money across different assets classes. Though our schemes have been ranked top performers 4 times in the last 12 months, we believe that engaging with the customer and getting them to a certain level of comfort is paramount in building the trust. The success of this thought process is evident from the fact that most of our clients prefer to stay with us (some graduating from advisory services to PMS).
If you still feel a bit confused and would like to have further information contact us on mobile number___ or write to us on___. We look forward to hearing from you and to adding great value to you and change your life positively.