Portfolio Management Service (PMS)

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Types of Portfolio Management Services (PMS)

Portfolio Management Services (PMS) refers to an investment portfolio in equities, fixed income, cash, debt structured products and other individual assets that is managed by a professional money manager and can be adjusted to fit specific investment objectives. Unlike in mutual funds where investor owns units of the fund, when you invest in PMS funds, you own individual securities. You have the suppleness to customize your portfolio to meet your specific requirements and objectives. Despite the fact that portfolio managers may be in charge of hundreds of accounts, yours may be one of a kind.

Active Portfolio Management

Active portfolio management necessitates a high level of market knowledge. The approach is referred to as “active” because it necessitates a continuous review of the market to acquire assets when they are cheap and sell them when they are overvalued. The approach necessitates rigorous market analysis, broad diversification, and a solid grasp of the business cycle.

Discretionary Portfolio Management

The fund manager has total control over their client’s investment decisions when using a discretionary portfolio management technique. The discretionary manager makes all of their customers’ buy and sell decisions and employs whichever approach they believe is optimal. Individuals with substantial investment knowledge and expertise can only offer this plan. Clients who utilize discretionary managers are comfortable entrusting their investment decisions to a professional.

Passive Portfolio Management

Because its proponents believe in the efficient market theory, passive portfolio management isn’t concerned with ‘winning the market.’ Put another way; they think that fundamentals will always be reflected in the underlying asset’s value. Risk-averse investors generally prefer passive techniques. Investing in an index fund that tracks the S& P 500 or another market index is one of the simplest methods to apply a passive approach.

Non-discretionary Portfolio Management

A financial adviser, in essence, is a non-discretionary portfolio manager. They will explain the advantages and disadvantages of investing in a certain market or strategy, but without your approval, they will not carry it out. The main distinction between a non-discretionary and a discretionary strategy is this.

Summing Up

We hope the points mentioned above about Portfolio Management Services (PMS) will help you know and invest in the fund of PMS with proper planning. Know the details and follow the steps whenever required.