Portfolio Management Service is a professional service provided by experienced portfolio managers through investment in stocks, bonds and fixed income securities, custom-tailored to meet specific investment objectives of the clients. Under this service the investor owns individual securities unlike mutual funds where the client owns units of the fund. Despite the portfolio managers overseeing numerous portfolios, each portfolio is unique as it is constructed taking into consideration the specific investment objectives of the client in an efficient manner backed with extensive research.
A Discretionary PMS is where the portfolio manager makes investment decisions on their own discretion in line with a risk profile and investment guidelines agreed with the clients beforehand. The portfolio manager has authority to manage the portfolio without checking with the client before making any routine adjustments within the boundary of the agreed mandate but will still be required to verify in advance if they wish to make a change that is outside the scope of the agreed upon investment guidelines.
A Non-Discretionary PMS is where the portfolio manager makes investment recommendations based on the risk profile and investment guidelines of the client and makes investment decisions with the client’s discretion. The portfolio manager can consult and suggest the investment ideas to the clients based on their initial investment guidelines and risk return appetite, but the execution of investment timing solely rests with the client.