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FAQs

1. WHAT IS PMS?

Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a professional money manager, that can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns units of the entire fund. You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals. Although portfolio managers may oversee hundreds of portfolios, your account may be unique.

Investment Management Solutions in PMS, can be provided in the following ways:

>Discretionary - Under these services, the choice as well as the timings of the investment decisions rest solely with the Portfolio Manager.

>Non Discretionary - Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the timings of the investment decisions rest solely with the Investor. However the execution of trade is done by the portfolio manager.

>Advisory - Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the execution of the investment decisions rest solely with the Investor.

Note :In India majority of PMS providers offer Discretionary Services.

> PMS gives investors access to an institutional process of money management.

>Provides a customized solution by matching the unique circumstances and objectives of each investor.

>Wealth creation based on disciplined investment process is the crux of PMS.

> Effective diversification helps reduce portfolio volatility and enhances risk-adjusted returns over long term.

> MS gives investor direct ownership of the individual securities in the portfolio.

PMS can be offered only by entities having specific SEBI registration for rendering portfolio management services. Currently in India PMS is offered primarily by asset management companies (AMCs) and brokerage houses.

The Investment solutions provided by PMS cater to a niche segment of clients. The clients can be Individuals or Institutions entities with high net worth. Ideal for investors who:

>Looking to invest in asset classes like equity, fixed income, structured products etc.

>Desire personalised investment solutions.

>Desire long-term wealth creation.

> Effective diversification helps reduce portfolio volatility and enhances risk-adjusted returns over long term.

> Appreciate a high level of service.

Portfolio Management Services and Mutual Funds: The Differences
Features Management
PMS Provide ongoing, personalized access to professional money management services
MutualFund Provide access to professional money management services
Features Customization
PMS Portfolio can be tailored to address each investor's specific needs (Non Discretionary)
MutualFund Portfolio structured to meet the fund's stated investment objectives
Features Ownership
PMS Investors directly own the individual securities in their portfolio, allowing for tax management flexibility
MutualFund Shareholders own shares of the fund and cannot influence buy and sell decisions or control their exposure to incurring tax liabilities
Features Liquidity
PMS Although managers may hold cash, they are not required to hold cash to meet redemptions
MutualFund Mutual funds generally hold some cash to meet redemptions
Features Minimums
PMS Significantly higher minimum investments than mutual funds. As SEBI Rules minimum investments is Rs 5 Lacs.
MutualFund Provide ongoing, personalized access to professional money management services
Features Flexibility
PMS Generally more flexible than mutual funds.The Portfolio Manager may move to 100% cash if required.The Portfolio Manager may take his own time in building up the portfolio.The Portfolio Manager can also manage a portfolio with disproportionate allocation to select compelling opportunities.
MutualFund Comparatively less flexible

If you fall under any of the following categories, you are eligible to enroll:

>Individuals.

>Hindu Undivided Families.

>Association of Persons.

>Limited Companies.

>NRIs, Overseas companies, firms, societies, and overseas Trusts (subject to RBI approval).

To sign up for this service you will have to fill in the Client Registration Form. In addition to this, you will have to execute an Agreement and a Power of Attorney in favor of R. Wadiwala Securities Pvt. Ltd., establishing a Principal-Agent relationship, which allows us to act on your behalf. Our Relationship Managers will be only too happy to assist you in the matter.

Under the Portfolio Management Scheme, each transaction scheme will be considered as an independent trade and capital gains will be applied on each depending upon whether the relevant stock was held long term or short term. Presently 15.66 % tax is chargeable for Short Term Capital gains and no tax is chargeable on Long Term Capital Gains. The STT charges will also apply.

Initial corpus can be brought into the Portfolio Management Service by way of either Cash and or securities/shares. The initial portfolio of securities/shares will be re-aligned as per the model. We sell shares as required to get the holdings re-aligned to our model portfolio.

As per regulations governing Portfolio Management Services in India, returns cannot be guaranteed. We shall endeavor to outperform the benchmark indices like Sensex & Nifty but there can be no guarantee or certainty of the same. We believe, over long term, equities performance will track corporate performance. Therefore historical trends indicate that well managed portfolio in Indian equities can yield upto 15-18% p.a. returns. However the future returns may be very different for market risk as well as risk with any portfolio manager’s judgment.

There is no upper limit on the amount you can invest in the Portfolio Management Service.

In most of our schemes the ideal time horizon for a equity portfolio is at least 24-30 months.

The Portfolio Management Service has no lock-in period you can at any point of time. However, the ideal time frame is 12 – 18 months as equities outperform most other asset classes only in the long run.

We invest as per objectives of a particular scheme. We typically pay more attention to a company’s fundamentals, valuations and not technical trends. Our portfolio’s do not mimic indices and are more governed by the bottom up approach.

Yes the payment has to be made upfront. He can introduce any additional amount later on.

No contract notes will be available. Detailed statement of accounts would be emailed at the end of the month. Physical copy will be sent quarterly.

No, the same form can be used for any scheme chosen.

No, the same form can be used for any scheme chosen.

FSince we offer only Discretionary Portfolio management Services, the discretion to invest primarily lies with the Portfolio Manager. Any securities/ shares handed over as initial portfolio will be aligned to the model. Therefore, it is advisable that you should hand over only those securities/ shares, which you are willing to sell and retain the ones you want to hold.

Under PMS all investments will be made in the name of the scheme.

Documents required: Demat & PMS Account opening form and the risk disclosure. Address proof/Identity proof /Pan card copy/Bank statements.

A Permanent Account Number (PAN) has to be provided for investment in the PMS scheme.

Yes, initial investment can be done by transferring your existing portfolio .The stock valuations will be taken when it is received in the R. Wadiwala Securities PMS Demat Account. The value of investment might fluctuate due to transaction incurred to re-align the portfolio with the scheme.

The following charges will be applicable

> Upfront charges : 0.50%

> Asset Management Fess : 2.50% pa

>Brokerage : 0.5% per transaction

Management fees are chargeable on daily average NAV at the end of each quarter or withdrawal of fund whichever is earlier. ( Pls refer the product brochure for complete bifurcation of charges).

You can withdraw your profit as & when you want, provided you maintain the minimum ticket size.

You can terminate from PMS at any time; charges as agreed would be applicable.

The Account Statement as well as the Statement of Holding of your equity portfolio will be couriered to you on a quarterly basis. You will be able to view the same online. The statements will have complete details of portfolio transactions and a comprehensive performance review which will be uploaded on the website.

R. Wadiwala Securities Pvt. Ltd. is a depository participant with Central Depository Services Limited (CDSL). This ensures complete safety in operations. Stock ownership always rests with the client.

At R. Wadiwala Portfolio Management, the Relationship Manager will discuss with you at length your financial goals and engineer a portfolio. Later on investment will be made according to the scheme objective.

Our Portfolio management Schemes are designed from a long-term perspective and we will invest in accordance with the objectives of each Scheme. It is advisable to keep any equity portfolio invested over a longer term because in the long run, equities outperform most other asset classes. Therefore, we do not indulge in any day trading activity by Portfolio Managers.

If the Portfolio Manager finds that an IPO presents a good investment opportunity then he may invest in the same.

Derivative transaction, if done, will only be for hedging purposes (as allowed by SEBI). No speculative position is allowed.

Part of the portfolio might be invested in debt or liquid fund till the time felt necessary.