A combination of various investment products like Bonds, Shares, Mutual Funds, Insurance products, Term Deposits with Banks & Corporates, Various Schemes of Post - office, Bullions, Properties, Antiques, Art Collections and so on is called a ‘Portfolio’.
A Portfolio may comprise of one or any of the above mentioned assets in different proportions as per one’s knowledge, awareness, confidence and capacity to invest in such investments/assets.
As a PMS provider, we invest only in instruments conforming to SEBI (PMS) regulations.
A Portfolio Manager is a body corporate who, pursuant to contract or arrangement with a client, advises, directs or undertakes Management or administration of a Portfolio of securities or the funds on behalf of the clients.
A Portfolio Manager, only after having specific SEBI registration can render portfolio management services to clients.
Portfolio Management Services (PMS) is a niche job of providing customized services to specific segment of individual or corporate clients individually or collectively as per the contracted agreement. The portfolio manager, before taking up an assignment of management of funds or portfolio of securities on behalf of the client, enters into an agreement in writing with the client, clearly defining the inter se relationship and setting out their mutual rights, liabilities and obligations relating to the management of funds or portfolio of securities, containing the details as specified in Schedule IV of the SEBI (Portfolio Managers) Regulations, 1993.
Portfolio Management Services (PMS), service offered by the Portfolio Manager, is a customized investment solution offered by professional money managers to select individuals to meet specific investment goals. Although Portfolio Manager may oversee a number of portfolios an individual’s portfolio may be unique.
Discretionary PMS: Under these services the choice as well as the timing of the investment decision rests solely with the Portfolio Manager.
Non Discretionary PMS: Under these services the portfolio manager only suggests the investment ideas. The choice as well as the timing of the investment decision rest solely with the investor. However the execution of the trades are done by the Portfolio Manager
Advisory: Portfolio Manager only advises on Portfolio strategy (asset allocation), Purchase/sale of securities, etc. Investment decisions, timings, execution of trades rest with the clients.
| Features | PMS | Mutual Fund |
|---|---|---|
| Management | Provide ongoing, personalised access to professional money management services | Provide access to professional money management services |
| Customisation | Portfolio is tailored to address each investor's specific needs | Portfolio is structured to meet the Scheme’s stated investment objectives |
| Ownership | Investors directly own the individual securities in their portfolio, allowing for tax management flexibility | Unit holders own units of the fund and cannot influence buy and sell decisions |
| Liquidity | Although managers may hold cash, they are not required to hold cash to meet redemptions | Mutual funds generally hold some cash to meet redemptions |
| Confidentiality | Portfolio confidentiality is maintained | No confidentiality for portfolio. |
Both Individuals and non individuals can invest in PMS
Investment solutions under the PMS will cater to the niche segment of clients both individuals and institutions with high net-worth in asset classes like equities, debt, structured products etc. This segment desire and customised investment solutions for long-term wealth creation and appreciate personalised services.
An investor can invest in a Portfolio Management Services in the following ways, namely,
The Portfolio Manager may at his discretion sell the existing securities in favour of fresh investments.
As per SEBI guidelines, the minimum value of investments under PMS should be INR 50 lakhs and there is no upper limit on the amount that can be invested in the PMS.
LICMF PMS has minimum ticket sizes for corporate and HNI clients across equity and debt, below which it will not manage portfolios.
PMS products are designed to suit individual customer preference. Broadly based on the investment objective products are either Equity Focused or Debt Focused or a combination of both.
Under Equity strategy your money will be invested in Equities and equity denominated instruments with the object of creating superior long term capital appreciation. This fund is ideal for Investors seeking patient, steady, safe returns through investment in equity market.
Under the Debt strategy your money will be invested in debt and debt related instruments like corporate bonds, G.Sec., CPs, CDs., etc. with the objective of generating superior long term return on a basket of these instruments
Yes. All investments do carry some amount of risk including the risk of erosion of capital. However the risks vary in accordance to asset class. SEBI regulations governing Portfolio Management Services prohibits the Portfolio Manager from giving any guarantee of the capital and the returns thereon. However it will be our endeavor to generate superior returns and outperform the benchmarks indices, however there is no guarantee of the same.
The portfolio manager manages the portfolio on behalf of the client through a Power of Attorney. So the tax liability of a PMS investor will be the same as if he was directly investing in the markets.
The return earned on the portfolio would be subject to tax as per the IT Act, 1961 being amended from time to time. Hence, it is suggested that the client should seek advice from his tax consultant for the same.
The portfolio manager would provide audited statement of accounts at the end of the financial year to aid the investor in assessing his tax liabilities.
The investor will be updated on his portfolio through standard reports from time to time.
Standard reports would include portfolio statement, portfolio performance, investment commentary, transaction statements, expense statements, etc which would be provided on a monthly basis or at such intervals as mutually agreed upon. Online access to select reports may be provided to the client so as to enable him to have access to information on his investments 24X7.
Our Relationship Managers will be available at all time to answer any information the client may need on his investments.
Investors generally have a choice between Fixed Annual Management fees or a combination of Annual Management fees and Performance Fees.
Annual Management fees will be calculated on the weighted average portfolio values and charged quarterly.
Performance Fees will be on annual basis and is a share in the profit generated over and above the agreed hurdle rate. Performance fees are charged on a High Water Mark Principle.
All incidental expenses like brokerage, STT, Demat charges, Audit fees.etc. are charged on actual.
Please drop us a mail at pms@licmf.com or call us on +91 22 66016000/6132.
You could also contact our Area Office near you. (click on area office to get address and phone number).
Our Relationship Managers will assist you with all the formalities that are required to be completed.
For Institutional Clients CITI Bank & SHCIL, for LICMF Value Equity Plus PMS HDFC Bank Ltd and for LICMF Factor Advantage PMS and LICMF All Weather PMS ICICI Bank Ltd has been appointed as the custodian.
Changing the name of a nominee in the PMS account just requires the client to fill up and sign one form. The client should reach out to his / her relationship manager or write directly to us on pms@licmf.com to get this done.
All resident Indian clients become beneficiary owners in the pooled bank in proportion to the value of funds transferred by them into this account. LIC Mutual Fund AM Ltd is NOT one of the beneficiary owner of this account. As a result, the pooled bank account will NOT get affected even in the unlikely event of all bank accounts of LIC Mutual Fund AM Ltd getting locked / sealed by the regulatory bodies. Use of pooled bank account is a structure provided by SEBI to help ease operations and reduce operational costs related to execution of PMS accounts.
In discretionary portfolio management service, the Portfolio Manager individually and independently manages the funds and securities of each client in accordance with the needs of the client.
Under the non-discretionary portfolio management service, the Portfolio Manager manages the funds in accordance with the directions of the client.
