A portfolio management service is offered by a dedicated portfolio manager who is responsible for investment into various securities like debt, fixed, stocks, equities, etc. A portfolio manager is responsible for investment into various types of securities where investment into a particular asset depends upon the total risk-taking power of an investor. Also, the investment outlay for PMS investment should be substantial. The funds and their underlying investment options can be tailor-made according to the needs and personal preferences of an investor.
The companies providing such services hire professionals who possess the knowledge to analyze various investment options. They identify investment options, analyze the same and invest in the same on behalf of the investor. Portfolio managers are made aware of the financial goals and risk-taking power of their clients. Best investment assets are therefore Identified and invested in. He/she receives complete discretion to make investment decisions like buy and sell to make available better returns for the investor.
The best part of PMS investments is that the investor gets hands-on individual investments i.e. stocks and equities rather than units of a particular fund. Moreover, PMS funds offer flexibility to an investor to invest in different assets for better returns. He or she receives complete information about a particular asset like the expense ratios. Professional management of an investment fund combined with access to information and continuous monitoring makes PMS funds highly lucrative for investors.
Portfolio management services providing companies or managers are broadly categorized into four types:
- Active portfolio management service providing company/manager:
An active portfolio manager is responsible for making better returns from an investment. She or she continuously monitors different investment assets and invest in the same according to his or her discretion. The risk associated with active portfolio management service is quite high as compare to other types of investment.
- Passive portfolio management service providing companies/managers:
A passive portfolio manager experiments with index funds and does not actively buy or sells securities. Moreover, the risk associated with passive portfolio management services is quite low as compared to those of active managers. The returns also range from low to medium.
- Discretionary portfolio managers:
Such types of portfolio managers are responsible for managing a PMS fund with full flexibility. However, discretionary portfolio management involves taking in the risk factors and preferences of a particular type of investor.
- Non-discretionary portfolio management providing companies:
Non-discretionary portfolio management involves providing support and advisory services rather than making an active investment. Investors receive complete guidance regarding investment into various types of options and assets.
Portfolio management services proved beneficial for investors who believe in long-term investing. Moreover, investors looking for wealth creation and dedicated services for hassle-free and convenient investment generally opt for such services. Every type of investor whether an individual or institution can opt for portfolio management services. Quality management and access to professional services attract investors towards portfolio management services as delivered by dedicated managers and companies.