Time For Some Serious Investments

Although It Is A Play For Well-Informed Investors, Understanding Some Key Parameters Is Crucial Before Investing To Avoid Pitfalls.

- Himali Patel

Portfolio Management Services (PMS) has come a long way since Sebi issued the market Portfolio Managers Regulations on January 7, 1993. Prior to that, it was just another innovative product offered by the banking sector mainly to the public sector undertakings in order to boost the former’s bottom line, preceding the Harshad Mehta scam in 1992.

Since then, it has emerged as one of the most preferred routes for investors, choosing to invest in equities. According to a Sebi data, as on August 2018, the total number of clients opting for PMS has doubled to 1.34 lakh in the last five years. According to pmsbazaar. com, an online platform exclusively dedicated to this product, currently, there are more than 290 PMS managers registered under Sebi.

“Today PMS is the choice for investors seeking alpha generating opportunities. The same is demonstrated by the strong growth of the industry over the last few years,” said Shahzad Madon, Head, PMS and Alternative Assets, Reliance Nippon Life Asset Management. As on August 2018, the assets under management (AUM) in discretionary equity PMS (listed equities) is 1,09,754 crore, which has shown a stellar growth of 21 per cent from 90,371 crore over last one year. And over the last five years, it registered 50 per cent compound annual growth rate (CAGR) from 14,497 crore.

Understanding Portfolio Management Services