What is Portfolio Management Service (PMS)?

A Portfolio Management Service (PMS) is a customized investment management service. Typically, a PMS advises clients or undertakes the management of a portfolio of securities or funds of the client.

How is PMS different from a Mutual Fund?

A mutual fund is an investment trust that collects funds from investors with a common investment objective and invests those funds in securities, which complement that objective. The rewards/risks are proportionately shared by all the investors in the Mutual Fund.

A PMS, on the other hand, is a tailor-made investment solutions provider that takes into account unique needs of investors. It is not possible to service all investors through a mutual fund due to the uniqueness/diversity of investment objectives. Thus, a PMS seeks to address investors’ requirements through an individual investment goal assessment exercise and portfolio building. The rewards/risks from the portfolio are borne solely by the investor for whom the portfolio is being managed.

What are the different ways in which Portfolio Management Service can be provided?

There are three different ways through which a PMS is offered: Discretionary, Non-Discretionary and Advisory. In discretionary PMS, independent charge is given by a client to the portfolio manager to manage his portfolio/funds. In non-discretionary PMS, the portfolio manager manages client portfolio/funds in accordance with the directions of the client and cannot act independently. Advisory, as the term suggests, involves advising the client on managing his investments. The client manages his own portfolio while the fund manager plays the role of an advisor only. This includes making investment recommendations to the client.

For whom is PMS ideally suited for?

Invesco PMS is ideally suited for HNIs having unique investment objectives. It caters to a niche set of knowledgeable investors who are concerned primarily with their investment growth with a parallel focus on capital preservation.

How is the PMS operated? Is any personal involvement required in its day-to-day functioning?

You are required to sign a PMS Agreement and also give us a Power of Attorney to handle all the operations related to the management of your portfolio.

What are the advantages?
  • Customized investment solutions
  • Efficient switching between cash and equities
  • Focused portfolio of stocks and sector concentration
  • Regular statements and investment updates
  • Professional management aimed at long term performance and risk control
  • Web-enabled access to your investment information
  • Audited statements at end of FY to gauge tax liabilities on the portfolio
  • Saves personal time due to delegation of your investment management to specialists
What is the minimum investment amount that I have to sign up for?

The minimum desired portfolio size varies for each product offering. For specific details you may contact the Relationship Manager.

Who will manage my portfolio?

Under PMS, your portfolio is managed by a team of Portfolio Managers supported by research analysts. These specialists create and actively manage your portfolio to provide you returns in line with your stated investment objectives.

Will derivative instruments be used under PMS?

Yes. Portfolio Managers are permitted to invest in derivatives for the purpose of hedging and portfolio rebalancing. However, leveraging is not permitted. The total exposure of a client to derivatives should not exceed the funds placed by the client with the portfolio manager.

Are returns guaranteed under PMS?

SEBI does not permit guarantee of returns.

What are the charges/Fees?

The fees are a combination of Fixed Management Fee plus Performance Management Fee.

How regularly can I get updated on my portfolio?

You can access your investment details 24X7 on invescomutualfund.com/pms/home ,through a secured login Id and password. You will also receive periodic statements on the performance and status of your portfolio

How do I sign up?

Firstly, you will have to fill in the Account Opening Form and execute a Power of Attorney in our favor to establish a Principal-Agent relationship. Only after this formality is complied with, we then can act on your behalf.

What is the Tax treatment?

Each PMS transaction is considered an independent trade and capital gains will be applied on each depending upon whether the relevant stock was held long-term or short-term. At present, 15% tax is chargeable for short-term capital gains and 10% tax is chargeable on long-term capital gains. Securities transaction tax (STT) is also applicable.

What are the risks associated with PMS?

Essentially risks associated with investing in equity are applicable in a PMS. Equity investments, though capable of posting high returns, carry commensurate degree of risk through company/sector concentration.

I am an NRI; Can I sign up for PMS?


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