If you are looking for good returns, then a portfolio management service is as reliable as the company and the fund manager. If you are looking for safety of capital, then in general PMS space is reliable because of stringent regulations by SEBI. Lets talk about this in more detail:
- When it comes to good returns, the reliability of a portfolio management service (PMS) heavily depends on the company and the fund manager handling your investments. A reputable company with a clear investment philosophy and proven track record of managing portfolios successfully is more likely to deliver good returns. The expertise and experience of the fund manager play a crucial role in making investment decisions that align with your financial goals. You must still make the effort to research the company’s and fund manager’s performance history, strategies, and approach to risk management to assess their potential to generate desired returns.
- As for the safety of capital, the PMS space is generally considered reliable due to the stringent regulations imposed by the Securities and Exchange Board of India (SEBI). SEBI has laid down a comprehensive set of rules and guidelines to govern the operations of portfolio management services in India. These regulations are designed to safeguard investors’ interests by ensuring transparency, proper disclosure, and adherence to ethical practices. Therefore, while investing in a PMS, you can have a certain degree of confidence in the safety of your capital.
A custodian is in place to keep ‘safe custody’ of your stocks and funds. This means the PMS manger cannot run away with your money. Please do remember that all investments carry inherent risks, and the safety of capital does not imply guaranteed returns. You must evaluate the PMS’s investment strategy and risk profile before making any investment decisions.
