Strategies to Select a good Portfolio Management Service

6 mins read
by Angel One

If you are a High Net-Worth Individual (HNI) or institution, looking for flexibility in investments, along with good returns, then you can zero in on the Portfolio Management Services (PMS) in India. Besides providing a range of investment solutions, the top portfolio management services in India will provide for streamlined and professional management of your investments.

In contrast to a portfolio management service in India, direct investments by individuals or institutions are fraught with multiple necessities such as proper knowledge of the market, access to the requisite tools for fundamental and technical analysis, market experience, constant monitoring, and impeccable decision-making skills.

Features and benefits of portfolio management service in India

Customised solutions:

Based on your investment objective and requirements, the professional money manager will create a diversified portfolio by investing in different asset classes such as stocks, debt instruments, fixed income instruments, etc. The key here is to strike the right balance between the various asset classes to receive optimum returns.

Adequate risk management:

All the good portfolio management services in India will allocate the asset classes only after understanding your risk appetite. The portfolio diversification exercise is undertaken by the professional manager to manage various types of risks such as market risk, liquidity risk, taxability risk, inflationary risk, regulatory risk, interest rate risk, and so on.

Types of portfolio management services in India

Good portfolio management services in India provide for two types of services :

Discretionary portfolio management services in India:

Here, the investments are solely at the discretion of the professional fund manager, without any intervention of the client. Once the client informs the fund manager of key factors, including financial objectives and risk tolerance, the latter proceeds with making investment decisions, on behalf of the client. In accordance with the terms and conditions of the services, regular meetings can be scheduled with the client for evaluation and assessment. Most companies in India provide discretionary PMS.

Non-discretionary portfolio management service in India:

Here, the professional fund manager provides various investment solutions to clients, as per their individual requirements and objectives. The role of the fund manager, in this case, is limited only to formulate ideas or solutions, and the client is at complete liberty to incorporate the ideas or reject them.

Strategies to select a very good portfolio management services in India

Now that you know the basics of portfolio management services, here is a look at strategies to select the ideal PMS:

Look for a portfolio management service with the right investment approach:

You should look for the top portfolio management service in India, following the principles of value and growth investing. The correct  investment approach is to focus on capital preservation while zeroing in on low-risk and high-return stocks. This can involve identifying the high return stocks at their earlier stages of growth, besides considering the real valuation of stocks. Remember, the top fund or money managers will never invest in stocks, solely based on their absolute market capitalization. At times, the good portfolio management service in India will also pick contrarian or unpopular stocks to invest in as these might have a higher potential for delivering good yield in the long term.

Look for proficient and streamlined services:

While selecting a good portfolio management service in India, you must look at the efficiency and convenience of the services being provided. You must select a PMS, providing online access to your portfolio, regular fund performance reports along with fund manager’s expert reports to stay updated on the performance of your funds. Alongside, look for a PMS that provides an annual CA-certified profit and loss account together with a balance sheet of investments. For superior services, consider crucial factors such as a dedicated fund coordinator for queries, centralized team of service coordinators, event-based interactions with the fund management team, and the option to avail services from a range of branches across the country.

Look for portfolio management services having a competitive edge:

To select the top portfolio management services in India, you must zero in on services having an edge over their competitors. To get the most out of your funds, look for features, like the absence of entry load, zero lock-in period, flexibility to shift from one investment strategy to another, additional purchase facility, and withdrawal facilities. Also, you must keep in mind that all good portfolio management services in India have an edge over their peers by providing multiple advantages. These include having an experienced and top-notch fund management team, dedicated and customized client servicing along with a personal relationship manager, proactive fund management, robust investment strategy, and regular newsletters from the team.

Look for hassle-free services:

When you want your money to be managed by the ideal portfolio management services in India, will you want to get bogged by any administrative hassles? Invariably not. Therefore, you must zero in on suitable portfolio management services, which take care of all the regulatory and administrative hassles of your investments.

Look for a personalized approach:

The top portfolio management services in India will invariably focus on a personalized approach, with direct interaction with the fund manager and the team via personal meetings, conference calls, video calls, written communications, and so on.

Look for convenience in filing tax returns:

While zeroing in on really good portfolio management services in India, remember to consider the key factor of receiving audited reports, either on a half-yearly or annual basis to calculate your tax liability. You can then file the tax returns yourself or by approaching a tax consultant.

Portfolio rebalancing meaning: What is it all about?

Portfolio rebalancing is essentially the method by which you, as an investor, modify the asset allocation in your investment portfolio. The need for this arises because the amount of money in each asset class keeps fluctuating as markets move and the economy changes. 

Generally, portfolio rebalancing strategies involve purchasing more assets in a certain investment class or selling assets in another investment class. This is done until the original target allocation of assets is achieved once again. 

Let’s look at an example to understand the portfolio rebalancing meaning better. Now, say you’re moderately risk-tolerant, so you opt for an initial target asset allocation that includes 50% equity investments and 50% investments in bonds and other debt instruments. Over time, say the stocks perform poorly, thereby reducing their weightage in the portfolio to 30%. In this case, to restore your original asset allocation of 50% equity and 50% debt, you’ll need to purchase more stocks, so the balance is restored. This is essentially what portfolio rebalancing looks like.

When should you rebalance your portfolio?

Typically, there are different triggers that make portfolio rebalancing necessary. Here’s a preview of some such scenarios or situations when you need to revisit your portfolio and check if it’s still aligned with your goals.

Changes in your risk profile

When you first constituted your investment portfolio, you may have been an aggressive investor who was open to taking more risks. But with time, your risk profile could have undergone changes. You may have become less tolerant to risks, making you a more conservative investor. In such a case, with changes in your risk profile, portfolio rebalancing becomes necessary.

A new financial goal on the horizon

Over time, new financial goals may be added to your objectives. When you start a family, for instance, you will have to make room for additional goals like paying for your child’s college education. When new goals like this are added to your investment objectives, you may need to revisit your portfolio to ensure that it’s capable of meeting these new targets. If it’s not so equipped, portfolio rebalancing can help.

Fast-approaching retirement

When you’re nearing retirement, it becomes increasingly essential to ensure that your investments are properly aligned to meet your retirement goals. Rebalancing your investments may be necessary to help you achieve that target corpus you have in mind. So, if you find yourself just a few years from the big day, check your portfolio and use portfolio rebalancing strategies to adjust the asset allocation, if needed.

Portfolio rebalancing strategies: How to rebalance your portfolio?

Rebalancing your portfolio will depend specifically on your investment needs and goals. However, a few simple steps can help you understand the process better. 

  1. Have a target asset allocation in place. Factor in your life goals, your risk appetite and your retirement goals to make your asset allocation aligned with your investor profile. 
  2. Constitute your investment portfolio based on your required asset allocation.
  3. Revisit your portfolio every six months or every year to check if the assets therein continue to adhere to the original target allocation.
  4. Also revisit your asset allocation target periodically to ensure that it is in tune with your life goals.
  5. In case your target allocation is not met, you may have to purchase new units of some assets or sell off existing units of other assets as needed, till the right asset allocation is achieved once more.
  6. Keep in mind the tax ramifications, particularly in the case of capital gains. Holding on to your stocks for more than a year will help you avoid paying short-term capital gains taxes. Debt funds will be subject to taxation on short-term capital gains based on the income tax brackets of those who invest in them. Long-term capital gains are subject to a 20 per cent tax rate, which is indexable. You should sell the securities in the tax-exempt accounts first if you are forced to reduce your spending. You can reduce the tax you are liable for on capital gains in this manner


Thus, portfolio management services in India can provide you the opportunity for greater flexibility of investments along with optimum returns. In the case of discretionary portfolio management services, stocks and securities will be purchased and sold in your name by transferring the power of attorney to the name of the fund/money manager. While selecting the top portfolio management services in India, look for crucial variables such as greater transparency and value-added services. With active review and balancing, world-class management, robust investment strategy, and matchless features, Angel One offers a really good discretionary portfolio management service in India.