- What is Portfolio Management Services (PMS)?
A Portfolio Management Service (PMS) is a service which provides professional management of investments to create wealth. It aims to cater to the investment needs of individuals or entities with high net worth value by providing them with investment solutions.
- What are the different ways in which Portfolio Management Service can be provided?
There are three different ways through which a PMS is offered:
- Non-Discretionary and
In discretionary PMS, independent charge is given by a client to the portfolio manager to manage his portfolio/funds.
In non-discretionary PMS, the portfolio manager manages client portfolio/funds in accordance with the directions of the client and cannot act independently.
Advisory, as the term suggests, involves advising the client on managing his investments. The client manages his own portfolio and takes its own investment decision while the portfolio manager plays the role of an advisor only. This includes making non-binding investment recommendations to the client.
- Who can open a PMS account with Quantum?
You can open a PMS account with us, if you are:
- An Individual
- A Hindu Undivided Families
- An Association of Persons
- A Limited Company
- An NRI (Non-Resident Indian), overseas company, firm, society or an overseas trust (subject to RBI approval)
- Foreign Portfolio investors (FPIs subject to approval from SEBI)
- Can NRIs avail of Portfolio Management Services?
Yes, they can open portfolio management services. They will have to open a PIS account as required under RBI guidelines in order to invest in the PMS scheme.
- What investment strategies are available?
Currently we are offering PMS services only in long only India equity strategy. The objective of the long-only equity product is to achieve long-term capital appreciation by investing in shares of publicly listed companies located in, or whose primary markets are located in, India, or who otherwise have a substantial portion of their business located in or other strategic relationships with customers or suppliers located in India. The investment strategy of Quantum Advisors is to take advantage of the long term growth in the Indian economy that is anticipated to occur as the country, its markets and economy develop.
- How do I become a portfolio client?
Before taking up an assignment of management of funds or portfolio of securities on your behalf, you will have to execute a PMS agreement with Quantum Advisors, clearly defining the nature and scope of services relating to the management of funds or portfolio of securities.
The agreement will be for a minimum period of one year and based on the confirmation from the client it can be extended for another period as agreed between the parties.
You have to open a bank and Demat account with HDFC Bank (Custodian for our Portfolio Management Services) exclusively for the purpose of our PMS. Further, you will have to execute a power of attorney / letter of mandate in favour of Quantum Advisors to operate the said accounts. Quantum will in turn give another POA to HDFC Bank to honour all the instructions given with respect to settlement of trades and debiting the clients account for management fee.
- What is the minimum that I need to invest in your PMS scheme?
The minimum initial investment amount is Rs. 5 Crores. Quantum Advisors, at its own discretion, can accept lesser amounts, subject to regulatory requirements.
- What is the tax treatment in PMS investment?
The tax liability of a PMS investor would remain the same as if the investor is accessing the capital market directly. However, the investor should consult his / her tax advisor for the same. The Portfolio Manager ideally provides audited statement of accounts at the end of the financial year to aid the investor in assessing his / her tax liabilities.
- Are there risks associated with PMS investments?
Yes. All investments into a PMS involve a certain amount of risk, including the possible erosion of the principal amount invested, which varies depending on the security selected. For example, investments in small and mid-sized companies tend to involve more risk than the investments in larger companies.
- Do you guarantee any returns on the portfolio managed by you?
No, we do not guarantee or indicate any returns on the portfolios managed by us. It has to be distinctly understood that investing in equities is a risky proposition and there exists a risk to the principal amount invested. Further, SEBI guidelines prohibits the portfolio manager from guaranteeing or indicating a return, either directly or obliquely.
- Can I withdraw the money any time I want to?
Yes, subject to the provisions of the PMS agreement, the client may at any time withdraw securities or funds from the client portfolio.
- How will you report to me and keep me updated on the performance of the portfolio?
We send out monthly reports to clients about their portfolio performance and holdings etc. At the end of the year you shall also receive an Audited Financial Statement. These reports will have complete details of your portfolio transactions and will help you monitor your portfolio on timely basis
- What is the fee structure for your PMS?
At present, we charge 1% p.a of the portfolio value as management fee.