Portfolio Management Services in India – An Overview

Portfolio Management Services(PMS) is a complete fund investment service by portfolio managers that helps investors invest and manage their folios or equity funds to achieve the desired rate of return. Extensive knowledge about securities and market conditions and the calculation of return risk ratio are part of the process. Not every individual is aware of the process and risks involved with investment, and this is where Portfolio Management Services in India comes into play.

Portfolio Management Services in India

What is Portfolio Management Services?

Portfolio Management Services (PMS) is a systematic way to maximize profits on your assets while lowering the risk component. It allows you to effortlessly make wise selections backed by substantial investigation and verifiable information. Since investing in stock and other finance portfolios involves risk, one needs to have a proper backup to handle market difficulties.

In other words, PMS customizes investment plans for each investor based on their financial capacity and risk tolerance. Decisions on the solutions revolve around debt vs. equity investment, risk-to-return ratios, investor’s time horizon, or the time they are ready to invest.

Portfolio management services in India are offered to high net worth valuable clients. The portfolio manager drafts an Investment Policy Statement (IPS) covering the client’s financial position and investment return needs.

What are the Types of Portfolio Management Services in India?

When you decide to use portfolio management services in India, the first thing to do is open a different bank account. Investors would also require a Demat Account, which is a part of portfolio investment. Your investments will be kept in the Demat account, and your bank account will be credited with the profits. You can choose from different types of portfolio management services in India. Some of these are-

  • Active portfolio management: This type aims to outperform a market index like Nifty. To outperform the index, an active portfolio manager will have positions that differ from the tracking index’s and will actively buy and sell securities following institutional research. However, the strategy takes on more risk to get an extra return.
  • Passive Portfolio Management: This service aims to allocate funds to the same stocks at comparable weights and seeks to replicate the performance of an index. We call this index investment or indexing. However, the transaction costs are low due to less portfolio churning with securities turnover than with active management.
  • Discretionary Portfolio Management: Under this PMS, investment funds are entrusted to a manager or broker with the authority to make investments on the client’s behalf. In this case, the investor must just put in cash—not time. Once you have a word with the broker regarding your investment objectives, everything will be taken care of, and you can rest assured of good returns. The fund manager will do the job so that you can rip the seed of profit without any risk. Discretionary Portfolio Management is best if you want to avoid stress and do not have much time to attend to every sale and purchase of every stock.
  • Non-Discretionary Portfolio Management: This portfolio management is best for those who don’t want to hand over the portfolio to others. Under this, the portfolio manager is a counselor, offering advice on your funding objectives. Whether or not to heed the counsel would be entirely up to you. Selecting a workable plan and ensuring it is presented logically is crucial, regardless of whether you choose to work with a portfolio manager or handle the task yourself.

What is the Process of Portfolio Management Services?

The portfolio manager has complete insight into the market, defines investment objectives, converts them into attainable goals, assigns assets to meet those goals, and rebalances the portfolio to correct any mismatch in the risk. There is a complete process involved in PMS. These are-

  • Planning: Creating an Investor Policy Statement (IPS) is the first step in the portfolio management process. From an investor’s perspective, willingness and ability to take risks are defined in the investor policy statement. Additionally, it establishes the investors’ goals about risk and returns while considering each person’s IPS.
  • Execution: The second phase is called execution, and it entails dividing the investment corpus among different asset classes and products within those asset classes to satisfy the IPS’s specified risk-return profile.
  • Feedback: This process involves monitoring the portfolio’s overall performance and adjusting the assets per the required returns. If the folio works as expected, the manager can rebalance it for higher returns.

What Benefits do Portfolio Management Services offer?

When you seek PMS for investment purposes, you come across multiple benefits. Some of these are-

  • Asset Diversification

One of the significant benefits of investing in PMS is the asset diversification and investing research involved. A lot of technical analysis is involved in supporting the investment decisions made by the skilled fund managers overseeing PMS. Fund managers who have management experience decide the dates of admission and departure.

  • Customization of Portfolios

Any PMS’s unique selling point is the degree of customization offered to individual investors. An investor can select the asset mix using PMS according to their level of risk tolerance. The investor’s liquidity requirements and investment objective are considered while customizing the portfolio.

  • Tax Planning

When making investments, an investor has a number of tax obligations to follow. Moreover, investors may be able to lower the tax liability they face by utilizing several tax provisions. Experts handling your portfolio make sure all of your investments are compliant with tax laws and can help you avoid taxes.

  • Controlled by Government Rules

Government rules majorly control PMS, and fund managers must follow the same. Portfolio managers must regularly provide government agencies with transaction statements, cost details, holdings, and other information. They must give investors access to their holding statements, income, costs, benchmarking, and comparable fund performance.

  • Instant Folio Access

Most fund managers work online and have created web portals for investors to access complete details on a real-time basis. They are given instant access to information about their portfolio holdings, expenses, and values. Investors will get full access to folio reports to understand investing rationale. Investors may also redeem, sell, or top up the portfolio online.

What are the PMS Charges in India?

When you look for portfolio management services in India, you are levied certain charges for every step of the Services. These are-

  • Entry Load– The entry fee is levied when investing using PMS. The general cost is around 3%.
  • Management Charges: In a PMS, management charges involve managing the entire portfolio. The cost may vary between 1% to 3% and is billed every quarter.
  • Profit Sharing: When you sign the agreement with the PMS provider, the profit-sharing percentage will be mentioned. The rate may differ from service to service.

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List of Top PMSes in India

According to market experts, the total assets managed by portfolio managers in India in the last five years is around Rs 27.9 lakh crore in the financial year ending 2022-23. With more and more people being exposed to the benefits of stock & fund investment, information availability, and multiple PMS options in India, the number is set to grow.  We have listed the top portfolio management services in India.

PMS Company Fixed Fees (PA) AUM (in cr) Performance Fee Brokerage and Exit Load
Motilal Oswal 2% – 2.25% Rs 10,200 0.3% brokerage per transaction; 1% – 2% load
Alchemy PMS 2% – 2.5% Rs 6010.49
Nippon PMS 2% – 2.5% Rs 3.49 lakh
Kotak PMS 2.50% Rs 1900 0.1% brokerage per transaction; 3%, 2%, 1% year-wise load
Birla Sun Life PMS 2.5% Rs 10,187 1.2% – 2.2%
Angel Broking 2% Rs 132,540 0.5% brokerage per transaction
ASK Growth Portfolio 1.5% 3290 1.5% plus 20% above 10% profits 1yr(5%), 2yr(4%), 3yr(3%), 4yr (1%)
SageOne- Core Portfolio 2.5 2750 1yr(3%), 2yr(2%), 3yr(1%)


Like any other form of fund investment, portfolio management also involves some risk elements. However, the terms and conditions involved in the management services will help you outline the danger associated with them. PMS operates in line with the objectives and preferences of the investor. So, choosing the right Portfolio Management Services in India will help you manage your funds and encourage a good return on investment.

FAQs for Portfolio Management Services (PMS) in India:

1. What is Portfolio Management Services (PMS)?

Ans: Portfolio Management Services (PMS) refers to professional services offered by financial institutions or portfolio managers to manage an individual’s or an entity’s investment portfolio on their behalf.

2. What key features should I look for in PMS?

Ans: When evaluating PMS, key features include the provider’s investment philosophy, transparent reporting, reasonable fee structure, diversification approach, experienced track record, regulatory compliance, customization options, user-friendly technology for portfolio monitoring, and clear exit terms.

3. Are there any risks involved in PMS?

Ans: Like stock and fund investment risks, portfolio investment also involves risk. Investing in small and mid-sized businesses is typically riskier than large organizations. In some circumstances, the principal amount can also be lost.

4. Who can avail of Portfolio Management Services in India?

Ans: PMS in India is typically available for high-net-worth individuals, institutional investors, and entities willing to invest significantly, as PMS often requires a minimum investment threshold.

5. What minimum investment is required for Portfolio Management Services in India?

Ans: The minimum investment amount for PMS varies among providers and may be influenced by the type of PMS (discretionary or non-discretionary). It is advisable to check with individual PMS providers for their specific requirements.

6. How are Portfolio Management Services regulated in India?

Ans: PMS in India is regulated by the Securities and Exchange Board of India (SEBI). SEBI has established guidelines and regulations to ensure transparency, fairness, and investor protection in the PMS industry.

7. Can investors monitor their Portfolio Management Services online?

Ans: Most PMS providers offer online platforms where investors can monitor their portfolios in real-time. This includes accessing investment reports, performance summaries, and transaction history.

8. Is Portfolio Management Services suitable for all investors?

Ans: PMS is typically suitable for investors with a higher risk appetite and a substantial investment corpus. It is essential for investors to thoroughly understand the associated risks and conduct due diligence before opting for portfolio management services.

Remember to consult financial advisors or PMS providers directly for the most accurate and up-to-date information regarding portfolio management services in India.


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by Instockbroker Team | May 28, 2024

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