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What is Portfolio Management Services? What are the different types of PMS investments?

Portfolio Management Services is a professional service that’s offered by specialised managers registered with SEBI. It is a management service where experienced fund managers and stock market professionals are assigned to you to monitor your investment portfolio and make the necessary changes required to ensure that your investments provide you with the expected returns. PMS targets to maximize returns for a given market risk. There are two different types that are typically offered – discretionary PMS and non-discretionary PMS.

What is the difference between discretionary portfolio management service and non-discretionary portfolio management service?

In discretionary portfolio management services, the professional in-charge of an investment portfolio manages the funds and securities independently without the involvement of the client.

In a non-discretionary portfolio management service, the professional in-charge of an investment portfolio manages the funds and securities according to the client’s directions and input.

Who is an ideal PMS investor?

Individuals and corporate entities with a high net-worth, who are looking for customized investment solutions that are designed to satisfy their needs and requirements are ideal PMS investors.

What is the minimum and maximum investment that can be made in a PMS?

While each fund house can define minimum investment amount that they require, SEBI mandate is a minimum of INR 50 lakhs
There is no maximum limit to the investment that you can make in a particular PMS

How is Portfolio Management Services taxed?

All holdings in a PMS are held in the name of the investor and hence taxed same as other financial investments made by the investor

Tailwind Financial Services Pvt Ltd is not qualified to provide tax advice and the above should not read as tax advice. There may be many exceptions to the generalisation stated above, so please be sure to consult with your tax advisor and accountant before making an investment.

What are the paperwork and documents needed to open a PMS account?

Each fund house offering a PMS has their own process, however as a general practice you would need to sign the PMS agreement, power of attorney agreement, a new demat account open form and produce documents such as PAN card, Identity proof and address proof. However, this would vary subject to fund specific requirements

How is Alternative Investment Fund (AIF) different from PMS and MF?

AIFs combine the operational ease of a mutual fund (pool based investing) and the flexibility of a PMS making it a blend geared for generating optimum performance for a stipulated investment objective.

What is the minimum and maximum ticket size for an investor to invest in any Alternative Investment Fund (AIF) scheme?

While each fund house can define minimum investment amount that they require, SEBI mandate is a minimum of INR 1 crores (in most types of AIFs)

There is no maximum limit to the investment that you can make in a particular AIF

How is an AIF investment taxed?

AIF taxation is specific to the structuring and may be either at the fund level (where it is will distributed post tax to investors) or in hands of investor (where investor specific taxation will be applicable)

Tailwind Financial Services Pvt Ltd is not qualified to provide tax advice and the above should not read as tax advice. There may be many exceptions to the generalisation stated above, so please be sure to consult with your tax advisor and accountant before making an investment.

Is demat account necessary to invest in an AIF?

No, demat is not required.

Who can invest in an AIF or a PMS?

Usually all resident Indians are eligible to invest in any AIF / PMS. There are certain scheme specific restrictions in case of NRI or Foreign entities.