Investing in Portfolio Management Service (PMS).
Investing in portfolio management services is one of the most preferred option for NRIs to grow their wealth back in India. In PMS the investor would own individual securities whereas in mutual funds the investor would own units of the fund. Another key distinguishing factor or advantage that PMS has over mutual funds is that the performance of the PMS is not affected by the inflow and outflow of money as it does in mutual funds.
PMS is the preferred choice of investors when it comes to achieving a pre-planned goal. PMS offers diversification and personalized investment solutions for long-term wealth creation. PMS is the ideal route by which the investor can own the stocks in his own name while using the expertise of the fund manager. PMS is very dynamic and can be altered at any time based on the ever-changing conditions of the stock market. This offers a great advantage to PMS investors as they will make the most of any fluctuations in the stock market.
Can Non-resident Indian (NRI) invest in Portfolio Management Services (PMS) in India?
NRIs are allowed to invest in Portfolio Management Services in India– as long as they adhere to the rules of the Foreign Exchange Management Act (FEMA). However, some Asset Management Companies (AMCs) do not accept PMS applications from tax residents of Canada & USA and some has restrictions over online investment transactions.
Key Elements of Portfolio Management Services:
Pre-requisites for PMS Investments:
|Type of Income||Taxation levy in India||TDS rate (Withholding tax rates)*|
|Sale of Listed Shares – STT paid at the time of purchase and sale (except for shares purchased before STT came in force).||Period of holding less than 1 year – Short Term Capital Gain.
Capital gain @ 15%. (U/s. 112A)
|15% (U/s. 195)|
|Period of holding more than 1 year – Long Term Capital Gain.|
Capital gain @ 10%.
Exempted up to Rs. 1,00,000.
|10% (U/s. 195)|
Advantage of equities as an asset class
Solutions customized to the needs of HNIs
Portfolio Managers take buy/sell decisions on behalf of, but in consultation with a client
Portfolio Managers regularly interact with clients to update them on portfolio strategy, performance, and market outlook
Better handholding from his portfolio manager than he has been accustomed to either on his own or from his broker or mutual fund.
One can also expect to interact with the portfolio manager to discuss any concerns that he might have, though not frequently.
All administrative matters, including operating a bank account and dealing with settlement and depository transactions, will be handled by the Portfolio Manager.<.li>
The objective of Portfolio Management Service is to create wealth by delivering consistent long term performance with risk control.
1) PMA tracks the portfolios constantly by understanding the dynamics of equity as an asset class.
2) PMS got a defined investment philosophy and strategy which acts as a guiding principle in defining the investment universe.
3) PMS make sure that you are relieved from all the administrative hassles from your investments. We also provide periodic reports on the performance and other aspects of your investments.
1. Fortnightly reporting: This gives you information like the portfolio net worth, a monthly report of holding, and bank balances
2. Quarterly reporting: This gives you details of portfolio holdings/transactions, net worth, ledgers, fees, corporate benefits, etc.
3. You’ve got access to the website showing client holding & quarterly reporting of portfolio holdings/transactions.