“Portfolio Management Services (PMS) are a sophisticated investment avenue, designed specifically for High Net-worth Individuals (HNIs) who seek to generate wealth from equity investing. These services are not just about managing investments; they are about creating a personalized financial strategy that aligns with the unique needs and goals of the investor. The service is backed by a team of qualified and experienced portfolio managers and researchers who manage the equity portfolios with the objective of delivering consistent long-term returns while controlling risk.

This guide will delve into the intricacies of these services, shedding light on how they can serve as a powerful tool for wealth creation.

What is Portfolio Management Services?

Portfolio Management Services, often abbreviated as PMS, is a specialized service designed to manage an individual or institutional investor’s portfolio of stocks and other assets. This service is typically tailored to meet specific investment objectives and requires a high level of financial expertise to navigate the complexities of ever-fluctuating markets and generate superior alpha.

How does Portfolio Management Services Work?

The process of Portfolio Management Services is a comprehensive one, involving several steps:

• Planning: The first step involves creating an Investment Policy Statement (IPS) that outlines the investor’s financial position, needs, risk tolerance, and investment objectives. This step is crucial as it sets the foundation for the entire portfolio management process.
• Execution: Once the IPS is in place, the portfolio manager begins the execution phase. This involves allocating the investment corpus to various asset classes and products within these classes to match the risk-return profile stated in the IPS. The portfolio manager uses their expertise and market knowledge to select the most suitable assets.
• Monitoring and Rebalancing: The portfolio manager continuously monitors the performance of the portfolio and makes changes to the assets wherever they are falling short of their expected returns. Rebalancing of the portfolio might be done to achieve better returns, or the portfolio might stay as it is if it is performing as per expectation. This process ensures that the portfolio remains aligned with the investor’s financial goals, making timely adjustments as needed.

Fees Involved in Portfolio Management Services

When you start investing in a PMS, you may encounter several types of fees:

• Entry Load or Entry Fee: This is a fee charged at the beginning of your investment, typically around 3%, although it may vary.
• Management Charges: This is the service fee for managing your portfolio in a PMS. This fee can range from 1-3%, depending on the service provider, and is charged quarterly.
• Profit Sharing Fees: If a PMS has profit-sharing agreements between the client and the provider, in addition to other fixed fees, then the profit-sharing fees are based on the terms of the agreement. These fees are charged above a hurdle rate, which is the minimum amount of profit that the PMS needs to earn before it can charge a profit-sharing fee.
• Other Fees: A PMS may also levy other fees such as Custodian Fees, Demat Account opening charges, Audit charges, Transaction brokerage, and more.

It’s important to note that the fee structure can vary significantly between different PMS providers, and it’s crucial to understand all the charges involved before you start investing.

Benefits of Portfolio Management Services:

• Personalised Attention: The portfolios are designed based on an individual’s risk profile and financial goals.
• Professional Management: Qualified and experienced professionals manage the portfolio, leveraging their understanding of the market to maximize returns.
• Diversification: Balancing risk by investing in a variety of assets.
• Regular Monitoring and Rebalancing: Continuous tracking and timely modifications to maintain alignment with financial objectives.

Why Choose Karma Capital for Portfolio Management Services (PMS)?

Karma Capital, a boutique portfolio management firm, offers a unique blend of expertise, commitment, and personalized service that sets it apart in the field of portfolio management. Here are some reasons why Karma Capital is an excellent choice for your portfolio management needs:

• Employee Ownership: Karma Capital is employee-owned, ensuring that there are no conflicts of interest. Their only business is asset management, which means their sole focus is on managing and growing your investments.
• Aligned Interests: The independence of Karma Capital guarantees that their interests are aligned with those of their investors. They succeed when you succeed, creating a partnership that works towards the common goal of financial growth.
• Long-Term Orientation: Karma Capital is patient and long-term oriented. They rely on their extensive, in-house, bottom-up, fundamental research process to make informed investment decisions.
• Consistent Philosophy and Processes: Since its inception in 2005, Karma Capital’s core investment philosophy, values, and processes have remained constant. This consistency provides stability and reliability in their services.
• Experienced Team: The team at Karma Capital has an established track record in the Indian equity markets across several market cycles. Their experience and expertise are invaluable in navigating the complexities of the market.
• Collective Evaluation: Investment ideas at Karma Capital are evaluated by the team collectively. This ensures that diverse views are considered, and the right decisions are made for investors.
• ESG Aware Approach: Karma Capital integrates an ESG (Environmental, Social, and Governance) aware approach that is relevant to the Indian markets in their overall research and analysis of companies. This approach considers the broader impact of investments, aligning financial growth with sustainable practices.
• Impressive Assets Under Management: As of December 2022, Karma Capital is responsible for managing assets of INR 4,054 Crores or USD 490 Million for institutional and individual investors spread across India and the rest of the world. This impressive portfolio under management speaks volumes about their credibility and trustworthiness.

Choosing Karma Capital for your Portfolio Management Services means choosing a partner that is committed to your financial success, offering personalized service, professional management, and a proven track record.

In conclusion, Portfolio Management Services serve as a navigator in the complex world of investments, fitting the pieces of your financial puzzle for optimum results. PMS, such as those offered by Karma Capital, align with your financial objectives, providing not only professional management of your portfolio but also peace of mind. You are encouraged to consider Karma Capital as a reliable partner for your PMS needs, for it’s a prudent step that can pave the way to achieving your financial goals.