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Phone:
+919358437749 -
Location:
D-36, Saket Colony, Behind HDFC Bank Near Pink Square Mall, Govind Marg, Adarsh Nagar, Jaipur, Rajasthan 302004, India
Portfolio Management Service or PMS, is a professional service in which certified and experienced portfolio managers, supported by a research team, manage stocks portfolios on behalf of customers rather than the clients managing their own. PMS is a highly customized solution for high net-worth individuals (HNIs), it offers greater flexibility with an investor’s money and higher returns too. As Mutual fund is a Pool vehicle for investment, here in PMS, every investor need to open a separate demat account and need to register power of atony with PMS Provider.
There are Two type of PMS services in Markert one is Discretionary and another is Non Discretionary PMS. Both have their own advantage & dis-advantage.
Discretionary PMS: In Discretionary Portfolio Management Services portfolio manager has
complete control over the portfolio and can adopt any strategy to achieve investment objectives.
Investment Decisions are entirely at the portfolio manager’s discretion, and the clients don’t have
much of a say in investment decisions. Portfolio Manager never discuss stocks with clients before
buying. This PMS is beneficial for client those don’t have very much understanding of equity and not
able to make decision their own.
Non-Discretionary PMS: In Non-Discretionary Portfolio Management Services, the portfolio manager gives investment ideas and Investor has to decide whether to take up these investment ideas or not.
In Non-Discretionary Portfolio Management Services, the fund manager suggests investment strategies and works according to the direction given by the client. Here complete control of Buying and selling of stock is with investor only. For Non Discretionary investor has to adequate knowledge of equity market & also have enough time for this.
Professional Management: PMS Services are managed by professional fund managers who have expertise in analysing markets, selecting securities, and managing portfolios. These managers has backup of research team and make investment decisions on behalf of investors, aiming to achieve the fund's investment objectives. These fund managers are highly qualified and experience.
Transparent: In PMS every investor have their separate demat account, those are provide access to various reports to client and carry a high level of transparency.
Active Monitoring and Rebalancing: Portfolio managers actively monitor investments and make adjustments based on changing market conditions, economic outlook, and investment objectives. They rebalance portfolios periodically to maintain alignment with the investment strategy and risk tolerance.
Convenience: PMS Platform is very convenient to clients who want to take equity exposure and feel the stocks holding his own. Its provide very convenient professional management.
Risk Management: Portfolio managers employ risk management techniques to mitigate downside risk and preserve capital. It has adequate diversification between sectors and stocks.
Taxation of PMS: In a PMS, investments are held directly in the investor’s name in demat account (and not via a trust like in a MF or AIF), the tax liability for the PMS investor is the same as the investor directly buying or selling shares/securities in his own name.
PMS Manager provide audited reports to client at every financial year for their calculation ease.
Generally, Equity taxations are implemented on PMS, which are as below-
What is AIF: Full form of AIF is alternative investment fund, Any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.
Type of AIF: AIF are divided into three category
Category I AIF: AIFs which invest in start-up or early stage ventures or social ventures or SMEs or infrastructure or other sectors or areas which the government or regulators consider as socially or economically desirable and shall include venture capital funds, SME Funds, social venture funds, infrastructure funds and such other Alternative Investment Funds as may be specified come under this category of AIF.
Category II AIF : AIFs which do not fall in Category I and III and which do not undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted in the SEBI (Alternative Investment Funds) Regulations comes under this category. Various types of funds such as real estate funds, private equity funds (PE funds), funds for distressed assets, etc are comes under category II AIF.
Category III AIF : AIFs which employ diverse or complex trading strategies and may employ leverage including through investment in listed or unlisted derivatives comes under this category. Various types of funds such as hedge funds, PIPE Funds, etc. are coming in category III AIF.
Minimum Amount of Investment: Minimum investment amount for AIF is One Crore. Which can we take either lum-sum or in some tranches.
Venture Capital : VC firms raise money from limited partners (LPs) to invest in promising startups or even larger venture funds. Venture capital (VC) is generally used to support startups and other businesses with the potential for substantial and rapid growth For example, when investing in a startup, VC funding is provided in exchange for equity in the company, and it isn’t expected to be paid back on a planned schedule in the conventional sense like a bank loan. VCs typically take a longer-term view and invest with the hope they will see outsized returns should the company be acquired or go public. VCs usually take only a minority stake — 50% or less — when investing in companies, also known as portfolio companies, because they become part of the firm’s portfolio of investments.
Angel Funds: Angel fund is a money pool created by high-net-worth individuals or companies (generally called angel investors), for investing in business start-ups. Angel Funds are a subcategory of venture capital funds with a special focus on startups, whereas venture capitalists generally invest at a later stage of the development of the company.
SME Funds: SME (small and medium enterprise) funds as their name suggests invest in listed/unlisted micro, small and medium enterprises. These companies tend to meet their debt capital requirements through NBFCs. However, there exists a vacuum when it comes to equity funding for these companies. Typically, equity funding goes to start-ups or established listed and unlisted companies. SME funds help bridge this gap by providing equity financing to these companies.
Social Venture Capital/Funds: Social venture Funds (SVC) is a type of impact investing that seeks to generate both financial return and social impact. SVC investors provide risk capital and support to social enterprises businesses that aim to solve social or environmental problems in exchange for equity or a portion of the enterprises profits. SVC has been growing in popularity in recent years as more and more impact investors look to back businesses that are having a positive social or environmental impact. While SVC still represents a small fraction of the overall impact investing market, it is one of the fastest-growing segments.
Taxation of AIF’s are based on 2 factors
Taxation of Category 1 & Category 2 AIF (Non Trust): Cat 1 & Cat 2 AIF’s are considered as pass-through vehicles for a taxation perspective. Any capital gains from the AIF are taxed directly in the hands of the investor.
Taxation for Category 3 AIF (Non Trust): These AIFs are NOT pass-through vehicles, and Cat 3 AIF’s are taxed at the AIF level itself. The taxation rate depends on the type of income:
Taxation of AIF if set up as a trust : Taxation of AIF trust is depend on income earned by Trust.
Cat-3 AIF’s are NOT pass-through vehicles, and Cat 3 AIF’s are taxed at the AIF level itself. The taxation rate depends on the type of income:
Business Income / Non-equity ST Capital Gains / Dividend Income. / LT Non-Equity Capital Gains:Tax slab based on structure
ST Equity Capital Gains: 15%
LT Equity Capital Gains: 10%
Cat 1 & Cat 2 AIF’s are considered as pass-through vehicles for a taxation perspective. Any capital gains from the AIF are taxed directly in the hands of the investor.
However, if the AIF income includes business income, this business income is taxed in the hands of the investor. The tax applicable depends on the legal form of the AIF – 30% for LLPs and 25% for Pvt Ltd companies.
The taxation of AIF’s set up as a trust, depends on 2 factors: (a) whether the AIF earns business income (b) whether the trust is Determinate or Indeterminate
