PMS / AIF
What is PMS (Portfolio Management Services)?
Portfolio Management Service, better known as PMS is a professional service that you can opt for if you want your financial portfolio to be managed by qualified and experienced managers. These managers, who manage the portfolio on behalf of their clients, are generally backed by a research team, that helps in identifying the client’s financial goals and give the right direction to their financial journey.
Having a portfolio management service can be a great way to make sure your investments are properly diversified and managed. A portfolio management service provides comprehensive advice on how to allocate and manage your money, as well as access to the latest market news and trends. This helps you stay informed of changes in the market, so you can make more informed and better decisions. The right service not just helps you save time by having all your financial information in one place, but also makes it easier to track investments and performance.
Portfolio management and wealth management are often considered to be synonymous, however, they are both quite varied in their approach. While portfolio management refers to the creation and progression of a client’s portfolio, wealth management is a broader spectrum which focuses more on enhancing an investor’s financial situation. It can be said that portfolio management is a subset of financial services that are offered under the umbrella of wealth management.
Who can avail of PMS service?
Portfolio Management Service is a customised service that is generally offered to HNI customers, High Net-worth Individuals. Tailored as per the customer’s risk appetite and future the portfolio managers form strategies to execute an optimum portfolio.
What is the minimum investment amount for being eligible for PMS?
The Securities Exchange Board of India, SEBI mandates a minimum of INR 50 lakhs as the investment amount in PMS.
- The service offers you customised investment plans that are in sync with your income, budget and risk appetite
- The experts know how to minimise the risk of an investment and thus help increase the potential profits
- Another advantage that you can expect is that your portfolio can make the most of diversification
- There is no lock-in period, you can withdraw your money anytime you wish to. However, you need to be mindful of the taxation on long as well as short-term capital gains
- If you want, your PMS can invest aggressively and thus increase give you more opportunities to generate higher returns
- Your portfolio is managed by fund managers who are seasoned professionals and have a lot of experience in the market.
When you invest through PMS, the aim is to invest aggressively. The returns, therefore, can be potentially higher, but then the risk of market fluctuations would always exist.
What is AIF (Alternate Investment Funds)?
India’s Alternative Investment Fund (AIF) industry has risen remarkably over the past few years and has outstripped the fast-growing traditional assets sector. If you are looking for investment options that go beyond stocks and bonds then you can surely consider alternate investment funds. While these funds offer the potential of a higher rate of return, they are not really aimed at the general public but HNI, that is High Net-worth Individuals, who wish to invest a big amount. Unlike mutual funds, AIFs need larger investments, allow higher flexibility, and are often suggested for investors with a higher risk appetite.
What other financial instruments/growth assets options are available for AIF?
There are multiple investment options such as:
- Infrastructure funds
- Angel funds
- Venture capital funds
- Debt funds
- Private equity funds
- Funds of funds
- Private investment in a public equity fund
- Hegde funds.
Who is eligible for AIF?
HNIs from India, Non-Resident Indias as well as foreign nationals who are over the age of 18 years and are willing to invest a minimum of INR 1 crore for a tenure of 3 years or more can opt for AIF.
What returns can one expect out of AIF?
Most investors consider AIFs to be a great way to stabilise your portfolio and safeguard your investments. As the funds are not put in public trading options, and are not related to the broader markets, AIFs do not fluctuate much. Considered to be a suitable source of passive income, the returns from AIF are typically stable.
