Introduction:
The Portfolio Manager’s Portfolio Management Services (PMS) are investment management services. A portfolio manager has a deep grasp of the businesses and use this knowledge to maximise investment returns. Stocks, fixed income, and other structured products are to be included in the investment portfolio. This is a core skill service in which certified and experienced portfolio managers with the support of a team of researchers manage equities portfolios on behalf of customers rather than the clients managing their own.
Investing in PMS is basically owning securities or assets individually. It is a sort of 360° investing solution for investors. It also helps the investors generally at each investment level and also provides solid returns. The services provided by the PMS can also be managed and customised as per the needs of the individual in terms of the risk the individual can bear, the expected reward he/she can get or the goal he/she is rooting for. These are some of the essential checklists which are to be made by the investor to make have better decision making. Such services of tailoring and customising a mentioned here are mentioned in the Investment Policy Statement (IPS).
Types of Portfolio Management services (PMS):
There are four main types of portfolio management services which are vital to be known:
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Discretionary Portfolio Management:
These services are the exclusive responsibility of the Portfolio Manager for choosing investment decisions and timing them. They do understand all the requirements of the investor like the risks, rewards, and the time frame it is associated with it but they make the decision by understanding which plan will suit the best for them with complete flexibility.
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Non-Discretionary Portfolio Management:
The portfolio manager solely proposes business plans under these arrangements. In this kind, portfolio manager plays a major role to be an advisor taking into consideration all the requirements and words of the investor. The Investor is the single recipient of the choice and the timing of financial decisions. The Portfolio Manager nevertheless carries out the trade.
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Active Portfolio Management:
An active portfolio manager takes various positions than the monitoring index, buys and sells assets effectively, to produce greater profit than the index, according to academic factors research. They try and make as much returns as possible which correlates with more risk associated with it which the manager tries to downsize.
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Passive Portfolio Management:
In general, the portfolio manager explores with Index funds with relatively modest sales and quite excellent long-term yields. In comparison with active management, the transaction costs arising from securities sales are low as the portfolio churning is lowest. Portfolio results are linked to the returns on the economy. The variation in results is very small.
Who are allowed to invest in Portfolio Management services?
The people who are allowed to invest in PMS are:
- Family businesses,
- High Net worth Individuals,
- Partnership firms,
- Sole-proprietor firms,
- Other non- individuals.
Benefits of portfolio Management services:
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Enhanced and Detailed transparency about the information:
PMS manager has a perk of knowing all the details associated with the portfolio even if the detail does not carry much importance. This can help them in making better decisions and enhancing present ones.
There is utmost transparency in the management of data and the structure of fees associated with it. The fee structure offers a complete breakdown of charges/expenses associated with a portfolio to investors. Now that consumers understand the various benefits of portfolio management services, they must determine who and what they might invest in PMS.
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There is flexibility and risk control:
As portfolio is comprised of the several assets and factors which makes it easier for the portfolio manager to adjust and manage the risks as there is a lot of flexibility possessed by the portfolio.
Flexible options will make it possible and easier for the client to control and risk and manage the profits and losses the company can make. You can also change the decisions if required and manage it as per the current requirement.
This will also help you to understand the right investment plan and track your financial performance as per your requirement.
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You can manage your liquidity and invest in regulated manner:
This plays a major role as there is no question that the need for cash might emerge at any time. So, portfolio management is one of the greatest investment services since it enables customers to arrange their investments in such a manner that they may sell off some assets when needed.
Investing in regulated manner while managing your liquidity will help you to attain satisfaction and have better understanding of your portfolio where in you can makes the decisions which will be according to your own terms.
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