Portfolio Management Service in Mumbai
PMS Advisor

As per SEBI regulations, the minimum investment for Portfolio Management Service (PMS) in India is ₹50 Lakhs (₹50,00,000). This regulation was introduced by SEBI to ensure that PMS remains a product for sophisticated, high-net-worth investors who can understand and bear the risks involved. If your investable surplus is below ₹50 Lakhs, mutual funds, particularly equity mutual funds, are the more appropriate vehicle.

In a discretionary PMS, the portfolio manager takes all investment decisions on your behalf under a Power of Attorney. You don’t need to approve individual trades — the manager buys and sells based on the agreed strategy. In non-discretionary PMS, you must approve every trade before execution. Most HNI clients prefer discretionary PMS because it removes the need for daily involvement, which is the entire purpose of hiring a professional manager.

PMS targets alpha — returns above the market benchmark — through concentrated, high-conviction portfolios. Because PMS portfolios hold 20–40 stocks versus 50–100 in a typical mutual fund, the fund manager can take stronger positions in their best ideas. This means PMS has higher return potential than mutual funds but also higher volatility in the short term. The benchmark for PMS performance comparison is typically the S&P BSE 500 or Nifty 500 index.

PMS fees typically include: (1) Fixed Management Fee — usually 1–2.5% p.a. charged on the portfolio value regardless of performance; (2) Performance Fee (Profit Sharing) — some PMS charge a percentage (usually 10–20%) of returns above a hurdle rate (e.g., 10% p.a.); (3) Some use a pure profit-sharing model with no fixed fee. All fees are disclosed in the SEBI-mandated Disclosure Document which you receive before investing. Fortune Wealth will walk you through the fee structure of each strategy.

PMS and mutual funds serve different purposes. For HNI investors with ₹50 Lakh+ in equity, PMS offers direct stock ownership, higher conviction portfolios, personalised strategy, and greater tax efficiency. These advantages can make PMS more suitable for HNIs than standard mutual funds. However, PMS requires a longer investment horizon (5–7 years minimum), higher risk tolerance, and greater involvement in understanding portfolio strategy. Many HNIs use both — mutual fund SIPs for systematic wealth building and PMS for their core equity allocation.

Yes — this is one of the most significant advantages of PMS over mutual funds. Since stocks are held directly in your Demat account, you can see your exact holdings at any time through your Demat account login. You receive monthly portfolio statements detailing every holding, every transaction, current value, and performance vs benchmark. Complete transparency is a core feature of PMS.

A multicap PMS strategy invests across large, mid, and small cap stocks without a fixed allocation to any market cap segment. The fund manager dynamically shifts across market caps based on where the best opportunities lie. Fortune Wealth offers three strong multicap PMS options — MOAMC Founders Strategy, MOAMC Value Migration, and Buoyant Opportunities Portfolio. Multicap PMS suits investors who want broad market exposure with the flexibility of a skilled manager identifying opportunities across the market cap spectrum.

Small cap PMS strategies invest primarily in companies ranked 251 and below by market capitalisation. They offer the highest long-term return potential among PMS categories but also carry higher short-term volatility. Fortune Wealth offers mid & small cap PMS strategies including MOAMC Mid to Mega, Abakkus AEOA, and Carnelian Shift Strategy. Small cap PMS is suited for investors with a 7–10 year horizon, high risk tolerance, and a genuine appetite for the volatility that comes with high-growth small businesses.

Most PMS strategies are designed for a minimum 5-year investment horizon, and ideally 7–10 years. Short-term PMS investing (under 3 years) is not recommended because equity markets can be volatile in the short term, and concentrated portfolios may underperform in certain market phases. The power of PMS lies in the fund manager’s ability to identify and hold quality businesses through market cycles — this requires patience. All 12 strategies available through Fortune Wealth have long-term wealth creation as their primary objective.

When comparing PMS strategies, look at: (1) Category fit — does the market cap focus match your goals?; (2) Fund manager experience — number of years, track record across cycles; (3) 3-year and 5-year returns vs the benchmark (S&P BSE 500); (4) Consistency — how often has the strategy beaten its benchmark?; (5) AUM — reflects investor confidence; (6) Portfolio overlap with other strategies if investing in multiple PMS. Fortune Wealth provides a detailed PMS comparison analysis for every client before recommending a strategy.

In PMS, since you own stocks directly, each stock is taxed individually at the time of sale. Shares held for more than 1 year attract Long-Term Capital Gains (LTCG) tax at 12.5% above ₹1.25 Lakh per financial year. Shares held for less than 1 year attract Short-Term Capital Gains (STCG) tax at 20%. Unlike mutual funds where all units are redeemed at once, PMS allows tax harvesting — the portfolio manager can strategically time exits to optimise your tax liability. This makes PMS more tax-efficient than mutual funds for many HNI clients.