Introduction
Investing in Portfolio Management Services (PMS) offers high-net-worth individuals (HNIs) a structured and personalised approach to wealth creation. Unlike mutual funds, PMS offers tailored strategies, active management, and professional expertise.
To maximise returns and minimise risk, investors must adopt proven strategies that focus on research, active monitoring, diversification, risk mitigation, and tax efficiency.
Here’s a complete guide to top PMS strategies in India, along with how each helps investors achieve their financial goals.
1. Focus on High-Conviction Stock Picks
High-conviction investing means concentrating on a select number of carefully researched stocks. PMS managers analyse company fundamentals, growth potential, and market trends to make timely, informed decisions.
Benefits for investors:
- Captures high-growth opportunities effectively.
- Allows active monitoring to respond quickly to market changes.
- Increases potential for outperformance compared to broad indices.
Example: In FY 2023–24, a mid-cap PMS strategy focusing on select high-conviction stocks delivered an 18–20% annual return, outperforming broader market indices.
2. Leverage Thematic and Sectoral Strategies
Thematic and sectoral strategies focus on specific industries or emerging trends, such as technology, renewable energy, or digital transformation. By aligning investments with favourable market trends, PMS can generate superior returns.
Benefits for investors:
- Positions portfolios in sectors with high growth potential.
- Captures gains from market trends before the broader market reacts.
- Provides targeted exposure while maintaining overall portfolio balance.
Example: In 2024, a thematic PMS strategy targeting renewable energy and digital transformation sectors achieved average returns of 12–15%, surpassing the NIFTY 50 TRI’s 10.09% return.
3. Diversify Across Market Capitalisations
Diversifying across large-cap, mid-cap, and small-cap stocks balances risk and reward. Multi-cap PMS portfolios enable investors to participate in growth across market segments while keeping stability with established companies.
Benefits for investors:
- Reduces portfolio volatility.
- Enhances resilience during market fluctuations.
- Optimises returns by leveraging opportunities across multiple segments.
Example: In FY 2023–24, a multi-cap PMS portfolio diversified across large-, mid-, and small-cap equities delivered 15% returns, balancing growth and stability.
4. Implement Robust Risk Management Practices
Risk management is crucial for protecting capital and maintaining consistent performance. PMS managers use stop-loss limits, portfolio rebalancing, and liquidity buffers to minimise losses during volatile periods.
Benefits for investors:
- Limits downside in uncertain market conditions.
- Ensures long-term wealth creation without excessive exposure.
- Builds confidence while pursuing consistent growth.
Example: During a volatile market period in May 2024, a portfolio employing stop-loss limits, rebalancing, and liquidity buffers achieved consistent returns of 8 -10%, despite small-cap underperformance.
5. Optimise Tax Efficiency
Tax-efficient investing is a crucial component of PMS. Long-term PMS investments may qualify for capital gains tax exemptions, and specific structures, such as Category III AIFs, offer pass-through taxation. Understanding tax implications helps investors maximise post-tax returns.
Benefits for investors:
- Reduces overall tax liability on gains.
- Enhances post-tax wealth creation.
- Aligns investment planning with long-term financial objectives.
Example: Long-term PMS investments held for over three years benefited from capital gains tax exemptions, resulting in higher post-tax returns. Strategic allocation to tax-efficient instruments enhanced overall wealth retention.
Additional PMS Advantages
- Continuous Monitoring: Managers track portfolios daily, making timely adjustments to stay aligned with market conditions.
- Research and Analysis: Access to in-depth company and sector research ensures informed decision-making.
- Transparency and Communication: Regular reports and updates build trust and confidence.
- Customised Investment Plans: Portfolios are tailored to individual goals, risk tolerance, and liquidity needs.
Why Choose Equentis Investech?
At Equentis Investech, we offer more than portfolio management. Our expert managers, continuous monitoring, and data-driven research ensure clients get top PMS returns in India.
We provide:
- Personalised PMS investment strategies for long-term wealth creation
- Experienced managers who actively monitor and adjust portfolios
- Transparent reporting and clear communication
- Data-driven insights to guide smart investment decisions
Choosing Equentis Investech means partnering with a trusted advisor who prioritises performance, risk management, and investor confidence.
