1. WHAT IS PMS?
Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed
income, debt, cash, structured products and other individual securities, managed
by a professional money manager, that can potentially be tailored to meet specific
investment objectives.
When you invest in PMS, you own individual securities unlike a mutual fund investor,
who owns units of the entire fund. You have the freedom and flexibility to tailor
your portfolio to address personal preferences and financial goals. Although portfolio
managers may oversee hundreds of portfolios, your account may be unique.
Investment Management Solutions in PMS, can be provided in the following ways:
- Discretionary - Under these services, the choice as well as the
timings of the investment decisions rest solely with the Portfolio Manager.
- Non Discretionary -Under these services, the portfolio manager
only suggests the investment ideas. The choice as well as the timings of the investment
decisions rest solely with the Investor. However the execution of trade is done
by the portfolio manager.
- Advisory -Under these services, the portfolio manager only suggests
the investment ideas. The choice as well as the execution of the investment decisions
rest solely with the Investor.
Note: In India majority of PMS providers offer Discretionary Services. Angel Broking
Ltd offers Discretionary Portfolio Management Services.
- PMS gives investors access to an institutional process of money management
- Provides a customized solution by matching the unique circumstances and objectives
of each investor.
- Wealth creation based on disciplined investment process is the crux of PMS
- Effective diversification helps reduce portfolio volatility and enhances risk‐adjusted
returns over long term
- MS gives investor direct ownership of the individual securities in the portfolio
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2. Who can offer PMS?
PMS can be offered only by entities having specific SEBI registration for rendering
portfolio management services. Currently in India PMS is offered primarily by asset
management companies (AMCs) and brokerage houses.
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3. Who is an ideal PMS investor?
The Investment solutions provided by PMS cater to a niche segment of clients. The
clients can be Individuals or Institutions entities with high net worth. Ideal for
investors who:
- Looking to invest in asset classes like equity, fixed income, structured products
etc
- Desire personalised investment solutions
- Desire long‐term wealth creation
- Appreciate a high level of service
Portfolio Management Services and Mutual Funds: The Differences
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Features
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PMS
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Mutual Fund
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Management
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Provide ongoing, personalized access to professional money management services
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Provide access to professional money management services
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Customization
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ortfolio can be tailored to address each investor's specific needs
(Non Discretionary)
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Portfolio structured to meet the fund's stated investment objectives
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Ownership
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Investors directly own the individual securities in their portfolio, allowing for
tax management flexibility
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Shareholders own shares of the fund and cannot influence buy and sell decisions
or control their exposure to incurring tax liabilities
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Liquidity
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Although managers may hold cash, they are not required to hold cash to meet redemptions
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Mutual funds generally hold some cash to meet redemptions
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Minimums
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Significantly higher minimum investments than mutual funds. As SEBI Rules minimum
investments is Rs 5 Lacs.
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Provide ongoing, personalized access to professional money management services
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Flexibility
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Generally more flexible than mutual funds. The Portfolio Manager may move to 100%
cash if required. The Portfolio Manager may take his own time in building up the
portfolio. The Portfolio Manager can also manage a portfolio with disproportionate
allocation to select compelling opportunities
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Comparatively less flexible
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If you fall under any of the following categories, you are eligible to enroll:
- Individuals
- Hindu Undivided Families
- Association of Persons
- Limited Companies
- NRIs, Overseas companies, firms, societies, and overseas Trusts (subject to RBI
approval).
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To sign up for this service you will have to fill in the Client Registration Form.
In addition to this, you will have to execute an Agreement and a Power of Attorney
in favor of Angel Broking Limited, establishing a Principal‐Agent relationship,
which allows us to act on your behalf. Our Relationship Managers will be only too
happy to assist you in the matter.
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6. What are the tax implications of investments in PMS?
Under the Portfolio Management Scheme, each transaction scheme will be considered
as an independent trade and capital gains will be applied on each depending upon
whether the relevant stock was held long term or short term. Presently 15.66 % tax
is chargeable for Short Term Capital gains and no tax is chargeable on Long Term
Capital Gains. The STT charges will also apply.
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7. How can I introduce my initial corpus?
Initial corpus can be brought into the Portfolio Management Service by way of either
Cash and or securities/shares. The initial portfolio of securities/shares will be
re‐aligned as per the model. We sell shares as required to get the holdings re‐aligned
to our model portfolio.
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8. Do you guarantee the initial corpus and any ‘return’ thereon?
As per regulations governing Portfolio Management Services in India, returns cannot
be guaranteed. We shall endeavor to out perform the benchmark indices like sensex
& Nifty but there can be no guarantee or certainty of the same. We believe, over
long term, equities performance will track corporate performance. Therefore historical
trends indicate that well managed portfolio in Indian equities can yield upto 15‐18%
p.a. returns. However the future returns may be very different for market risk as
well as risk with any portfolio manager’s judgment.
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9. Is there a maximum limit for investing in the Portfolio Management Service?
There is no upper limit on the amount you can invest in the Portfolio Management
Service.
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10. What is the time horizon?
In most of our schemes the ideal time horizon for a equity portfolio is at least
12‐18 months.
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11. Does the Portfolio Management Service have any lock-in period?
The Portfolio Management Service has no lock-in period you can at any point of time.
However, the ideal time frame is 12 – 18 months as equities outperform most other
asset classes only in the long run.
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12. What is your investment philosophy?
We invest as per objectives of a particular scheme. We typically pay more attention
to a company’s fundamentals, valuations and not technical trends. Our portfolio’s
do not mimic indices and are more governed by the bottom up approach.
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13. At what frequency, can I see my NAV, positions and transactions?
You can check your portfolio on a daily basis by logging on to our website http://pms.angeltrade.com.
In addition, you get monthly statements of transactions, holdings etc. You can also
access these reports online.
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14. Is the payment upfront?
Yes the payment has to be made upfront. He can introduce any additional amount later
on.
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15. Will the Contract Notes be available in physical form or online?
No contract notes will be available. Detailed statement of accounts would be emailed
at the end of the month. Physical copy will be sent quarterly.
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16. Are there different forms for different funds?
No, the same form can be used for any scheme chosen.
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17. Is there any pre-decided percentage of amount by which we will be compulsorily
invested at any given time?
No, the same form can be used for any scheme chosen.
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18. Can I specify investments that I want or don’t want to hold?
Since we offer only Discretionary Portfolio management Services, the discretion
to invest primarily lies with the Portfolio Manager. Any securities/ shares handed
over as initial portfolio will be aligned to the model. Therefore, it is advisable
that you should hand over only those securities/ shares, which you are willing to
sell and retain the ones you want to hold.
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19. In whose name investment will be made?
Under PMS all investments will be made in the name of the scheme.
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20. What is the paperwork and documentation needed to open a PMS account?
Documents required: Demat & PMS Account opening form and the risk disclosure. Address
proof/Identity proof /Pan card copy/Bank statements.
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21. Do I need to have Permanent Account Number?
A Permanent Account Number (PAN) has to be provided for investment in the PMS scheme.
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22. Can you give scrip's instead of funds ? If yes, then how will the scrip's be
valued?
Yes, initial investment can be done by transferring your existing portfolio .The
stock valuations will be taken when it is received in the Angel PMS Demat Account.
The value of investment might fluctuate due to transaction incurred to re-align
the portfolio with the scheme.
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23. What is the Fee Structure for PMS? Fee Structure:
The following charges will be applicable.
- Asset Management Fess: 2.0% pa
- Brokerage: 0.5% per transaction
Management fees are chargeable on daily average NAV at the end of each quarter or
withdrawal of fund whichever is earlier. ( Pls refer the product brochure for complete
bifurcation of charges)
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You can withdraw your profit as & when you want, provided you maintain the minimum
ticket size.
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25. What if I terminate from the PMS before one year?
You can terminate from PMS at any time; charges as agreed would be applicable
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26. How regularly can I get updates on my portfolio?
The Account Statement as well as the Statement of Holding of your equity portfolio
will be couriered to you on a quarterly basis. You will be able to view the same
online. The statements will have complete details of portfolio transactions and
a comprehensive performance review which will be uploaded on the website.
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27. How safe are my securities under the Portfolio Management Service?
Angel broking is a depository participant with Central Depository Services Limited
(CDSL). This ensures complete safety in operations. Stock ownership always rests
with the client.
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28. Where will you invest my money?
At Angel Portfolio Management, the Relationship Manager will discuss with you at
length your financial goals and engineer a portfolio. Later on investment will be
made according to the scheme objective.
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29. Do you indulge in day trading under PMS?
Our Portfolio management Schemes are designed from a long-term perspective and we
will invest in accordance with the objectives of each Scheme. It is advisable to
keep any equity portfolio invested over a longer term because in the long run, equities
outperform most other asset classes. Therefore, we do not indulge in any day trading
activity by Portfolio Managers.
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30. Do you invest in IPO’s?
If the Portfolio Manager finds that an IPO presents a good investment opportunity
then he may invest in the same.
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31. Do you invest in Derivatives (Futures/Options)?
Derivative transaction, if done, will only be for hedging purposes (as allowed by
SEBI). No speculative position is allowed.
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32. Do you invest in debt instruments? What proportion?
Part of the portfolio might be invested in debt or liquid fund till the time felt
necessary.
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