Portfolio Management Services (PMS) are non-traditional, professionally managed investment solutions for high-net-worth individuals, offering diversification and aiming at delivering higher returns. PMS is managed by skilled and experienced fund managers who create and manage portfolios comprising stocks, fixed income, debt, cash, structured products, and other securities. These portfolios are aligned with specific investment strategies. PMS ensures regular, transparent reporting of portfolio holdings, performance, and fees, with ongoing reviews and adjustments to keep portfolios aligned with predefined strategy and market conditions. Unlike mutual funds, where investors own units of a fund, PMS investors own individual securities, making each account unique.

PMS offers three types of services: discretionary, non-discretionary, and advisory. We offer access to discretionary PMS. Discretionary Portfolio Management Services are ideal for mature investors who trust their manager’s expertise and prefer a hands-off approach. PMS managers run various pre-defined customized strategies as specified in their offer documents. Investors can choose from these predefined strategies based on their needs.

According to SEBI regulations, the minimum investment for PMS is ₹50 lakhs. Income from PMS is taxed in the hands of the investor. Long-term capital gains (LTCG) and short-term capital gains (STCG) are taxed at 10% and 15%, respectively. Other incomes like dividends and interest are taxed at rates applicable to the investor. PMS is well-regulated by SEBI to ensure investor protection, transparency, accountability, and compliance.

PMS often incorporates a high-water mark and a hurdle rate to ensure fair performance fees. The high-water mark is the highest value an investment account has reached, ensuring managers aren’t paid for poor performance. The hurdle rate is the minimum return an investment must achieve before performance fees apply. These mechanisms ensure that investors only pay for meaningful outperformance.