In 2024, High-Net-Worth Individuals (HNIs) enjoyed a great year by investing in Portfolio Management Services (PMS). Many PMS schemes have delivered impressive returns, some exceeding 50%. This highlights the benefits of professional money management and the potential for substantial wealth growth through well-chosen investment portfolios.
Most portfolio management services (PMS) schemes outperformed the benchmark Nifty 50 and BSE 500 in the financial year 2024, thanks to a rally in mid and small-cap stocks. According to data from PMS Bazaar, 80%, or 264 out of 324 schemes, surpassed the returns generated by Nifty. These schemes delivered average returns of 45.2%, compared to Nifty’s 30.1%.
Understanding PMS
Before delving into the top-performing PMS schemes, it’s essential to understand what PMS entails. Unlike mutual funds, PMS offers a personalized investment management service catering to individual client’s specific needs, risk appetite, and investment goals. PMS managers have the flexibility to construct customized portfolios, often investing in a concentrated basket of stocks, which can lead to higher returns but also increased volatility.
Top Performers
During the first half of 2024, almost all portfolio management services (PMS) schemes generated positive returns for high-net-worth individuals, while the benchmark BSE Sensex rose nearly 10%. The BSE MidCap and BSE SmallCap indices saw even greater increases, rallying 25% and 22%, respectively.
According to PMSBazaar data, Turtle Wealth Management’s Profit Mantra emerged as the star performer, with a remarkable 47.81% return from January to June. Following closely were Green Lantern Capital’s Growth Fund (up 44.89%), Wallfort PMS and Advisory Services LLP’s Diversified Fund (up 43.09%), Moat Financial Services’ UpperCrust Wealth Fund (up 41.80%), and NAFA Asset Managers’ fund (up 41.80%).
A Year of Exceptional Performance
The Indian equity market witnessed a robust rally in 2024, driven by a combination of factors, including a stable political environment, strong economic growth prospects, and favorable global liquidity conditions. This bullish sentiment translated into exceptional returns for PMS schemes, particularly those with a growth-oriented mandate.
Here is a list of a few more PMS schemes that have given more than 50% return in a year:
| Product Name | Product Category | 1 Year Return |
| Bonanza Edge | Multi Cap | 73.32% |
| ABANS Smart Beta Portfolio | Mid and Small Cap | 58.02% |
| AccuraCap PicoPower | Small Cap | 61.30% |
| Aditya Birla Capital Select Sector Portfolio | Multi Cap | 56.5% |
| Alchemy Capital Management Ascent | Multi Cap | 61.5% |
| Carnelian Capital YnG strategy | Multi Cap | 78.1% |
| Equitree Capital Advisors Emerging Opportunities | Small Cap | 86.04% |
| Invaasset LLP Growth Fund | Multi Cap | 117.25% |
6 Factors Contributing to Outstanding Performance of PMS Schemes
- Favorable Market Conditions: The overall bullish market sentiment and strong performance of mid-cap and small-cap indices provided a conducive environment for PMS schemes to generate substantial returns.
- Stock Selection and Portfolio Construction: The top-performing PMS schemes likely benefited from strong stock selection and well-diversified portfolios. Their ability to identify high-growth potential stocks and manage risk effectively contributed to their outstanding performance.
- Focus on Mid-Cap and Small-Cap Stocks: Many PMS schemes have a significant allocation to mid-cap and small-cap stocks, significantly outperforming large-cap stocks in 2024. The Nifty 50, being a large-cap index, couldn’t fully capture the gains in these segments.
- Sectoral Bets: Some PMS schemes might have focused on specific sectors that witnessed exceptional growth during the period. For instance, sectors like technology, financials, and non-essential consumer goods often exhibit strong performance in bullish markets.
- Higher Allocation to Growth Stocks: PMS schemes often allocate more to growth stocks, which have been the primary drivers of market returns in 2024.
- Risk Management: Effective risk management practices have helped PMS managers protect their clients’ capital during market downturns.
Several PMS managers have been at the forefront of this stellar performance. These managers have demonstrated their ability to identify high-quality businesses, time their investments effectively, and navigate market volatility with finesse. Their deep understanding of the Indian corporate landscape has been instrumental in delivering superior returns to their clients. Let’s list out some of the advantages of Portfolio Management Services:
Advantages of PMS
Portfolio Management Services (PMS) offer several advantages over traditional investment options:
Customization
- Tailored portfolios: PMS allows personalized investment strategies aligned with individual investor risk profiles, goals, and preferences.
- Flexibility: PMS managers can adapt portfolios to changing market conditions and investor needs.
Expertise
- Professional management: Investors benefit from the expertise of experienced portfolio managers who conduct in-depth research and analysis.
- Dedicated service: PMS provides personalized attention and regular updates on portfolio performance and market trends.
Potential for Higher Returns
- Active management: PMS managers actively manage portfolios, seeking opportunities to outperform the market.
- Concentrated portfolios: Some PMS schemes focus on a select group of high-conviction stocks, potentially leading to higher returns (but also higher risk).
Transparency
- Regular reporting: PMS providers offer regular updates on portfolio performance, holdings, and investment strategy.
- Access to information: Investors can access the portfolio manager and discuss investment decisions.
Diversification
- Broader investment universe: PMS can invest across various asset classes and sectors, offering diversification benefits.
- Customizable asset allocation: Investors can choose the asset allocation that suits their risk tolerance.
Convenience
- Hassle-free investment: PMS managers handle all investment decisions, saving investors time and effort.
- Regular rebalancing: Portfolios are regularly rebalanced to maintain the desired asset allocation.
Conclusion
The exceptional performance of PMS schemes in 2024 has highlighted the potential benefits of professional money management for HNIs. However, investors should exercise prudence and diversify their portfolios across various asset classes to mitigate risk. By carefully selecting PMS managers with a proven track record, investors can enhance their chances of achieving long-term wealth creation goals.
*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
FAQs
What are PMS schemes?
PMS stands for Portfolio Management Services. It’s a professional investment management service offered by registered entities to high-net-worth individuals (HNIs). PMS managers create customized investment portfolios based on clients’ risk profiles and investment objectives.
How do PMS schemes differ from mutual funds?
Unlike mutual funds, PMS offers a personalized investment approach, tailoring portfolios to individual client needs. PMS managers have more flexibility in stock selection and portfolio construction compared to mutual funds.
What is the minimum investment amount for PMS schemes?
The minimum investment amount varies across PMS providers. Generally, PMS schemes cater to high-net-worth individuals, and the minimum investment is typically higher than mutual funds.
What are the fees involved in PMS schemes?
PMS schemes typically charge a combination of management fees and performance fees. The exact fee structure depends on the PMS provider.
What is the role of technology in PMS?
Technology plays a crucial role in PMS, enabling data-driven analysis, portfolio optimization, and efficient client servicing.
How do PMS schemes manage risk?
PMS managers employ various risk management strategies, such as diversification, stop-loss orders, and hedging techniques, to protect investors’ capital.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
