Portfolio Management Services (PMS) offer a range of investment options to cater to the diverse needs and preferences of investors. Different types of PMS strategies are designed to achieve various financial objectives and risk profiles. Here are the main types of Portfolio Management Services in detail:
- Discretionary PMS:
- In a discretionary PMS, the portfolio manager has full authority to make investment decisions on behalf of the client without requiring prior approval for each transaction. The portfolio manager actively manages the portfolio, executing trades and rebalancing as needed based on the client’s financial goals and risk tolerance.
- Non-Discretionary PMS:
- Non-discretionary PMS involves the portfolio manager providing investment advice and recommendations to the client. However, the final decision to execute trades or make changes to the portfolio lies with the client. The portfolio manager acts as an advisor and implements the client’s decisions.
- Model-based PMS:
- Model-based PMS involves the use of pre-designed investment models that align with specific risk profiles and investment objectives. The portfolio manager constructs the portfolio using these models, ensuring consistency and adherence to the predefined investment strategy.
- Theme-based PMS:
- Theme-based PMS focuses on specific investment themes or sectors. The portfolio manager constructs the portfolio around particular themes, such as technology, healthcare, sustainability, or emerging markets, based on the client’s interests and outlook.
- Value PMS:
- Value PMS follows a value investing approach, seeking undervalued securities that are expected to outperform the market in the long term. The portfolio manager looks for fundamentally sound companies trading at attractive valuations.
- Growth PMS:
- Growth PMS emphasizes investing in companies with strong growth potential. The portfolio manager seeks out companies with high earnings growth rates and innovative business models, aiming to capitalize on their future growth prospects.
- Income PMS:
- Income PMS is designed to generate regular income for investors, especially those who prioritize stable cash flows. The portfolio manager selects income-generating assets like dividend-paying stocks, bonds, and other fixed-income instruments.
- International/Global PMS:
- International or global PMS focuses on investing in securities outside the investor’s home country. The portfolio manager aims to capitalize on opportunities in international markets and diversify the portfolio geographically.
- Small-Cap/Mid-Cap PMS:
- Small-cap and mid-cap PMS concentrate on investing in stocks of companies with relatively smaller market capitalizations. The portfolio manager aims to discover hidden gems and companies with high growth potential.
- Sector-Specific PMS:
- Sector-specific PMS concentrates investments in a particular sector or industry. The portfolio manager identifies sectors with favorable growth prospects and allocates the portfolio accordingly.
- Thematic ESG PMS:
- Thematic ESG (Environmental, Social, and Governance) PMS focuses on investing in companies that align with specific ESG themes, such as renewable energy, sustainable agriculture, or socially responsible businesses.
- Customized PMS:
- Customized PMS offers tailor-made investment solutions to meet the unique requirements and preferences of high-net-worth individuals and institutional clients. The portfolio manager designs the portfolio based on the client’s specific financial goals, risk appetite, and constraints.
Investors can choose from these various types of Portfolio Management Services based on their investment objectives, risk tolerance, and preferences. Each PMS strategy comes with its own set of advantages and considerations, and it is crucial for investors to carefully assess their financial needs and consult with a financial advisor before selecting a PMS service.