How to Choose the Best PMS in India?

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Portfolio Management Service, or PMS, is a highly customized investment service in which portfolio managers, aided by detailed research, manage equity investment portfolios for high-net-worth individuals. The objective of the PMS investment is to deliver long-term returns consistently while limiting the downside. As per SEBI norms, the minimum ticket size of a PMS investment is 50 lakhs.

The world of equity investing is very complex due to the huge volatility associated with it. Years of gains can often be wiped out with a single investment mistake. Hence, when the stakes are high in the form of high investible surplus, it makes sense for high net worth individuals to opt for the best Portfolio Management Services in India rather than experimenting with do-it-yourself investing.

Key factors to keep in mind while choosing the best PMS in India:

Sebi registration

Market regulator SEBI has made it mandatory for PMS providers to be registered with the apex body. Hence, it is important to check if the PMS provider is registered with SEBI before you take your second step. As SEBI-registered PMS providers work under the strict framework of SEBI guidelines, there will be fewer chances of the PMS providers taking investors for a ride or following unethical practices.

History of the PMS provider

PMS is not an easy business. Hence, any PMS provider who is not performing well may not be able to sustain itself for long in the market. While choosing the best PMS in India to invest your hard-earned money, it would be highly advisable to opt for one that has been in business for a long time and is well-established.

Past returns generated by the PMS

Investments in stock markets are highly volatile due to numerous factors. Hence, the past performance of any investment service can never be considered as a guarantee for the repeat of the same in future. However, it can help you to understand whether the PMS service has been able to generate wealth for investors consistently. You can also compare the past performance of the PMS vis-à-vis the performance of benchmark indices. For example, if the PMS has delivered a CAGR of 30% over a 5-year period compared to the Nifty 50, which has delivered a CAGR of 20%, the PMS is definitely a consistent and high performer.

PMS theme and approach

There are hundreds of PMS services in the market. To choose the best PMS in India, you should check for the investment theme and approach used by the PMS. It is important to understand how the PMS is different from others in the market. The PMS should clearly define the long-term objectives of choosing a specific investment theme and approach.

Risk management strategies used by the PMS

Equity investments are subject to market risks due to continuous fluctuations. Adequate risk management strategies can help in reducing the risk to a certain extent. Hence, it is advisable to check the risk management strategies used by the PMS beforehand. Ideally, there should not be an exposure beyond a certain limit in any stock or sector at investment cost levels. Portfolio diversification can help in avoiding concentration risk. A staggered approach for investment and rebalancing when required is also equally important.

Customer service

It is important for the PMS provider to be easily accessible to answer all your queries. Any service which aims to be the best PMS in India should provide multiple channels of communication, such as email/phone/chat support, etc. Also, the turnaround time for reverting to customer queries should be clearly specified.

Charges of the PMS

PMS services can charge either a fixed amount as a fee, a performance-based fee, or a combination of the two. Before choosing the best PMS in India, it is important to check the amount and the type of fees charged by the PMS for each activity.

How can Bonanza Portfolio help you ace the wealth creation journey?

Bonanza Portfolio is a SEBI-registered financial advisory service with over 1700 outlets and service in over 500 cities across India and the UAE. Established in 1994, Bonanza ranks as one of the most trustworthy names in the financial services space in India. Together with 5 mega group companies in its fold, Bonanza is the fastest-growing financial service in the country today.

Since its inception, Bonanza Portfolio has been instrumental in helping thousands of investors to achieve their financial goals.

Check out the outstanding past performance of Bonanza Portfolio below:

* For the period ended 30th Nov 2021

*For the period ended 30th Nov 2021

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Bonanza Portfolio’s Investment Strategies at a glance:

PMS Growth

Investment into emerging leaders with a consistent track record and with a focus on companies having excellent fundamentals for more than 5 -10 years
Mostly allocation across small and mid-cap stocks
Use of top-down as well as bottom-up approach
Focus primarily on the growth aspect – ROE/ ROCE/ Profit ratios

PMS Value

Investment in hand-picked companies with an excellent track record and growth prospects
Major allocations is across large-cap and mid-cap stocks that meet Bonanza Portfolio’s fundamental and technical research criteria
After initial screening, the final stock selection is done using growth triggers from Bonanza’s proprietary screener
Mostly top-down approach

Apart from outstanding returns through professional portfolio management, Bonanza Portfolio offers many other benefits to investors such as:

Monthly reports
24×7 online view of portfolio
100% transparency
Audited tax reports at the end of the financial year
Monthly newsletter
24×7 end-to-end support
Prominent business updates

Risk management strategies employed by Bonanza Portfolio

Concentration risk

Investment of not more than 10% in any stock
Exposure of not more than 25% in any sector at the cost level
Diversified portfolio consisting of 15+ stocks to minimize risk

Drawdown

A mostly staggered approach is used for investment
The investment committee revalidates whether any stock falls more than 30% from its average purchase price