Are you getting started off on your financial journey? This comprehensive guide to, smallcase returns Portfolio Management Services is your go to resource. You will learn the key concepts and everything you need to know for making informed decisions for your future investments.
Let’s Understand this in Detail…
What are Portfolio Management Services?
Portfolio Management Services, commonly known as PMS, refers to the professional management of a diverse portfolio of securities including stocks, bonds, mutual funds, and other investment instruments on behalf of individual investors. It is basically a personalized service which aims to maximize investment returns while considering individual risk factors and financial goals.
Types of PMS:
There are four main portfolio management types: active, passive, discretionary, and non-discretionary.
- Active PMS
- Passive PMS
- Discretionary PMS
- Non- Discretionary PMS
Active PMS: The fund manager is involved in reducing the risks of the investments and getting higher returns on it. Things happen actively in this type of PMS.
Passive PMS: There is no intervention of the portfolio manager, there is nothing like active trading in it but it silently matches the market’s performance with less risk involved.
Discretionary PMS: This portfolio management provides services in such a way as if a client has subscribed to this facility means the portfolio manager has the ability to make independent decisions about a client’s holdings.
Non- Discretionary PMS: This concept is just opposite of Discretionary PMS. A client’s involvement is higher; the client has high authority over the portfolio. The fund manager just has to advise on the investments and the final decision is of the client.
Benefits of PMS:
- Risk Management: The portfolios are monitored and managed by portfolio managers who utilize strategies aimed at reducing the risks of occurrence of losses such as selling a low performing asset. Unlike passive investment, this is a proactive approach to risk management and it makes PMS unique and different.
- Access to Diverse Assets: It contains different types of assets like equities, fixed income, commodities and alternatives which it accesses from various areas around the world. Diversity makes it possible to spread risks and take advantage of market trends in unplanned ways.
- PMS has a greater potential for higher returns.
- The fund managers have a wide choice of products like Real Estate Trusts, Commodities, Gold, ETF, Foreign Assets, Structured Products, etc.
- Many of these have a low correlation with equities, therefore the lower risk attached to it.
- PMS provides professional management portfolios by experienced and licensed portfolio managers.
- Portfolio managers continuously monitor the portfolios and make timely changes to improve the results.
Portfolio management is a procedure that helps in creating and handling a well-diversified collection of investments that matches with an individual’s financial goals and risk tolerance. These include monitoring market performances, customization of goals, expert guidance, analyzing risk factors, smallcase share price and making smart choices regarding investment strategies. PMS helps you make the most of your money.