When it comes to wealth creation, most investors start with fixed deposits or mutual funds. But as your portfolio grows, so does the complexity of managing it. That’s where Portfolio Management Services (PMS) step in. Designed for high-net-worth individuals (HNIs), PMS provides the customized and actively managed strategies characteristic of the top portfolio management services, which are tailored to your specific goals, risk profile, and long-term objectives.
In India, this segment has seen remarkable growth. According to SEBI’s Annual Report 2023–24, the assets under management (AUM) for top portfolio management services have crossed ₹3 lakh crore, reflecting the rising appetite for personalised investment solutions.
But why should you consider PMS over traditional investments? Let’s explore six key benefits that set the top portfolio management services apart.
1. Personalised Investment Strategy
Unlike mutual funds, where investors’ money is pooled into one portfolio, PMS is built just for you. Think of it as hiring a personal chef instead of going to a buffet.
Your portfolio manager studies your:
- Financial goals (retirement, business expansion, legacy planning).
- Risk appetite (conservative, balanced, aggressive).
- Liquidity needs (systematic withdrawals, reinvestments).
Based on this, they curate a portfolio across equities, debt, and even alternative assets like Real Estate Investment Trusts (REITs). This level of customisation helps align your investments with your lifestyle and ambitions.
2. Access to Expert Portfolio Managers
Managing ₹50 lakh or more (the SEBI-mandated minimum for PMS) isn’t easy. PMS gives you access to seasoned portfolio managers with deep market knowledge and research-backed strategies.
For example, while retail investors may only focus on blue-chip stocks, PMS managers can diversify into mid-caps, structured debt, or emerging REITs, balancing risk and growth. They also have the advantage of:
- Accessing institutional-level research.
- Spotting early trends in sectors like infrastructure and tech.
- Making quick portfolio adjustments in response to market shifts.
This expertise often translates into consistent, benchmark-beating returns. A PMS Bazaar study revealed that PMS strategies outperformed benchmarks by an average of 70% over multiple timeframes.
3. Diversification Beyond Traditional Assets
Most retail investors stick to stocks, mutual funds, or real estate. PMS broadens this horizon by including alternative investments like:
- REITs (Real Estate Investment Trusts): These allow you to earn rental income from commercial real estate without buying property directly. Investments can start from as low as ₹10,000.
- InvITs (Infrastructure Investment Trusts): Offering exposure to infrastructure projects like highways and airports.
- Thematic or sectoral plays: For example, renewable energy or digital economy funds.
By mixing traditional and alternative assets, PMS helps balance returns while reducing concentrated risk.
4. Transparency and Regular Reporting
One common worry among investors is not knowing what’s happening with their money. PMS addresses this with:
- Detailed quarterly reports.
- Portfolio valuations at regular intervals.
- Performance benchmarking against indices like NIFTY 50.
Thanks to fintech advancements, many PMS providers now offer real-time dashboards. This means you can track holdings, gains, and allocation at any time—something not as detailed with mutual funds.
This transparency builds trust and allows you to stay in control of your financial journey.
5. Tax Efficiency and Flexibility
PMS offers better flexibility in managing tax liabilities compared to pooled vehicles like mutual funds. Portfolio managers can:
- Sell specific securities to offset capital gains with losses.
- Adjust holding periods to avail long-term capital gains tax benefits.
- Customise withdrawal plans for tax optimisation.
For instance, a high-net-worth investor can plan systematic withdrawals from their PMS portfolio in a tax-efficient manner, much like Systematic Withdrawal Plans (SWPs) in mutual funds. This ensures liquidity without unnecessary tax leakage.
6. Potential for Higher Returns
With personalised strategies, wider asset choices, and professional management, PMS often generates higher returns compared to traditional investments.
Data backs this up. Between 2014 and 2024, PMS AUM grew from ₹7.3 lakh crore to ₹32.1 lakh crore, reflecting investor confidence in its superior performance.
While returns depend on market conditions and strategies chosen, PMS portfolios are designed to:
- Capture growth from emerging sectors.
- Use hedging strategies to manage downside risks.
- Outperform standard indices over the long run.
This makes PMS a compelling choice for wealth creation if you have a sizable corpus.
Additional Insights: Future of PMS in India
- Growing accessibility: PMS, once a “bespoke suit” only for the ultra-rich, is now reaching a wider audience thanks to fintech.
- Projected growth: The PMS and AIF industry is expected to grow at a 26% CAGR, reaching ₹43 lakh crore by 2028.
- Digital edge: Real-time analytics, AI-driven insights, and easier onboarding are making PMS services more efficient and transparent.
For investors, this means PMS will only get better, smarter, and more inclusive in the coming years.
Bottom Line
Investing in the best PMS services in India offers six clear benefits: personalisation, professional expertise, diversified exposure, transparency, tax efficiency, and higher return potential.
If you have a sizable corpus and want more than what mutual funds or fixed deposits can offer, PMS could be the right next step in your financial journey.
Frequently Asked Questions
1. What is the minimum investment for PMS in India?
SEBI mandates a minimum of ₹50 lakh for PMS investments.
2. How is PMS different from mutual funds?
Mutual funds pool money from multiple investors, while PMS creates a customized portfolio for each investor. PMS offers greater flexibility and personalisation.
3. Are PMS returns guaranteed?
No. PMS returns depend on market performance and the portfolio manager’s strategy. However, many PMS strategies have historically outperformed benchmarks.
4. Can PMS include REITs or InvITs?
Yes. Many PMS managers diversify portfolios with REITs, InvITs, and other alternative assets for steady income and diversification.
5. Who should invest in PMS?
PMS is best suited for HNIs who have ₹50 lakh or more to invest and are seeking customised, professionally managed portfolios.
