IQ Corner – Portfolio Management Services

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If you are too busy to give your investments the attention or if you are inexperienced, having a professional run your portfolio may be a good solution. This is because your money gets invested in a concentrated portfolio, according to your risk appetite and personal investment goals. When you opt for a PMS, a bank account, Demat account, and trading account are separately opened in your name and all investments are made in your name. Any income or dividend coming from the investment will be credited to your bank and this will be reinvested in your PMS account and the shares will be held in the Demat account in your name.

James : What is a portfolio management service?

Mathew : Many investors like you want to have a direct equity portfolio, but do not have all the expertise needed to manage the stock portfolio. Portfolio Management Services or PMS is for them. PMS is a professionally managed and customized service for high net worth clients. And it offers benefits of flexibility, risk diversification, liquidity etc.

James : What are the benefits of PMS?

Mathew : If you are too busy to give your investments the attention or if you are inexperienced, having a professional run your portfolio may be a good solution. This is because your money gets invested in a concentrated portfolio, according to your risk appetite and personal investment goals. When you opt for a PMS, a bank account, Demat account, and trading account are separately opened in your name and all investments are made in your name. Any income or dividend coming from the investment will be credited to your bank and this will be reinvested in your PMS account and the shares will be held in the Demat account in your name.

James : Is there a minimum investment amount for PMS?

Mathew : As PMS is a service for HNI investors who have a high[1]risk appetite, and the minimum investment required is Rs. 50 Lakhs – as increased by SEBI recently.

James : How do I monitor my investments?

Mathew : Market regulator SEBI has made it mandatory for portfolio manager to provide investors with regular performance reports. And today, most portfolio managers provide clients with online access. The transaction details and performance summary can be viewed 24X7.

James : What are the tax liabilities in PMS investment?

Mathew : These investments are taxed on the basis of transactions done in individual stocks. STCG of 15% is applicable if the profit is realised within 1 year in an individual stock. If there is any gain after holding 365 days then 10% LTCG is applicable over and above Rs. 1 Lakh.

James : Are there any risks associated with PMS investments?

Mathew : Yes. PMS investments are subject to risk based on the asset class the money gets invested in.

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