Your investment portfolio refers to the investments you make across securities such as bonds, stocks, fixed-income instruments, real estate, and gold. The percentage of investment you make across these securities depends on your risk tolerance, investment amount, and financial goals.
If you’re a novice investor just kickstarting your investment journey, understanding your risk profile, ideal investment avenues, and investment amount can be overwhelming and make you turn your back on investing before getting truly started.
Fortunately, you can engage Portfolio Management Services (PMS) that can help you on your financial journey. Here, we discuss what is PMS investment, and more.
Portfolio Management Service’s meaning is a specialised service which involves experienced financial managers managing your investments. PMS takes a structured approach towards investment with an aim to optimise returns.
Here’s a look at the types of portfolio management services:
1. Active Portfolio Management: The manager monitors market conditions actively and makes regular changes to the portfolio allocation and composition to earn returns higher than the benchmark index.
2. Passive Portfolio Management: The manager follows a defined strategy and doesn’t make frequent changes to your portfolio but aims to replicate the benchmark index’s performance.
3. Discretionary Portfolio Management: The manager has complete control over investment decisions and is responsible for the portfolio’s performance.
4. Non-Discretionary Portfolio Management: The manager offers recommendations to the investor, who has the final say and control over the portfolio.
Now that you know PMS services meaning, it's time to discuss how PMS works. In the case of PMS, an experienced portfolio manager or PMS house manages your investments. Based on your particular
financial goals and risk appetite, they will create a personalised investment strategy across securities like equity, real estate and debt instruments. The portfolio manager will monitor your portfolio continuously to make adjustments that will yield the maximum returns. The minimum investment for PMS is Rs 50 Lakhs.
After discussing what is PMS service and how it works, let’s explore its benefits:
1. Customised Investments: PMS offers you personalised investment strategies that align with your particular financial goals and risk tolerance.
2. Expert Management: An experienced portfolio manager manages your investments based on rigorous financial research, insight and analysis.
3. Regular Performance Tracking: The portfolio manager tracks your investments and makes adjustments to ensure high returns.
4. Effective Risk Management: The portfolio manager aims to minimise the risk of your investment while optimising returns through informed diversification and regular monitoring.
Now that you know the portfolio management service’s meaning, how it works, and the benefits of PMS, all you have left to decide is whether this is the right decision for you. To ascertain this, compare PMS providers and discuss your financial goals with them to understand which one suits your needs best.
If you’re looking for a reliable financial platform to manage your investments, consider Tata Capital Moneyfy. A one-stop shop for all your financial and investment needs, Tata Capital Moneyfy, helps you invest in mutual funds, SIPs, and stocks while also enabling loan and credit card applications. To learn more, visit the Tata Capital Moneyfy website or download the App now.
Yes, the Securities and Exchange Board of India (SEBI) regulates PMS accounts. So, they can be considered safe.
PMS providers must be transparent in their dealings, share reports periodically, and maintain a minimum net worth.
However, when investing directly in equities or structured products, your capital is subject to market risks, unlike fixed-return products. How safe your PMS account depends on the PMS provider’s track record and compliance standards.
You must ensure the PMS is SEBI-registered. Remember, review its disclosure documents before investing.
Understanding if Portfolio Management Services (PMS) are better than mutual funds depends on your investment goals, risk appetite, and investible surplus available.
PMS is designed for high-net-worth individuals (HNIs). The minimum investment is ₹50 lakh. Mutual funds have a minimum starting as low as ₹100.
Mutual funds offer more diversification. They are professionally managed and suitable for retail investors looking for regulated returns. PMSs are more concentrated and personalized. But they are riskier, less liquid, and the returns are taxed.
For most individual investors, mutual funds provide a more balanced combination of safety, performance, and convenience. PMS is suitable for seasoned investors with larger portfolios seeking personalized management.
PMS investments have these three models:
Yes, Portfolio management service investments are riskier than traditional investment products. This is because PMS portfolios are highly concentrated.
They are as diversified as mutual funds and invest in direct equities or structured debt. The stock market is prone to volatility, which affects investment returns, too.
Their performance can vary significantly depending on the strategy used. It can also deliver higher returns in the long term, especially under experienced fund managers using specialized strategies.
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09 July 2025
3 mins read
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