In discretionary PMS, the fund management team performs the research, builds the portfolio, decides when to buy or sell a security, and executes the trade on behalf of the client. In a non-discretionary PMS, the fund management team performs the research and provides recommendations to the client on which security to buy, when to buy and when to sell, but the decision ultimately rests with the client.
If you want to leave your investment portfolio in the hands of experts, without micro-managing the process, a discretionary PMS may be the right choice. Fund managers decide on investments in line with your stated objectives and desires (which are usually outlined in a document called the Investment Policy Statement).
Returns: Discretionary fund managers have a lot of flexibility which allows them to maximise returns and mitigate risk by diversifying across asset classes.
Decision-making: Fund managers have the discretion to decide on investments without seeking approval from clients. This makes for quicker decision-making, which can be a key differentiator, especially in volatile markets.
Convenience: As an investor, you do not have to be involved in the day-to-day management of your portfolio or worry about how it is performing.
Ownership: All securities are held in your demat account, and you have full control over them.
JM Financial Services Limited distributes a wide range of discretionary PMSes from leading financial service providers. Our relationship managers will help you identify the ideal PMS based on your risk appetite, return expectations, and financial objectives. We make transactions for our clients completely hassle-free and provide a single view of your investments, anywhere, anytime.
FACTBOX
In discretionary PMS, the client’s funds are managed by the portfolio manager who is responsible for stock selection and executing investment decisions.
In discretionary PMS, all decisions are taken by the fund manager, while in non-discretionary PMS, the fund manager suggests investment ideas and the investor takes the final decision.
There are many benefits of discretionary PMS:
Quick decision making: Fund managers can make decisions quickly without waiting for a go-ahead from the investor. In volatile markets, this can make quite a big difference between profit and loss
Convenient: As an investor, you do not have to track the markets or become involved in investing decisions. If you are a busy professional, this can be a big boon. You can leave decision to your fund manager, who is a professional and has the expertise to do so.
