When it comes to investing in Portfolio Management Services (PMS) services in India, understanding the various types of portfolio management is essential for choosing the most suitable option. Primarily, the PMS types can be categorised into 4 major types.

4 Major Types of Portfolio Management Services in India:

Active Portfolio Management: Central to this type of portfolio management is the ambition to generate returns that outpace market averages. In active portfolio management, active managers are keen on buying stocks when they’re undervalued and selling them once their value rises above the average. The role of the portfolio manager is crucial here, as they consistently survey the stock market to unearth the most promising investment opportunities. While this approach can yield substantial returns, it’s also fraught with high risks. It’s an apt choice for those with a penchant for risk and an eye on significant returns.

Passive Portfolio Management: This strategy stands in contrast to active management. Advocates of this approach are firm believers in the efficient market hypothesis, asserting that a company’s inherent value is always mirrored in its stock price. In passive portfolio management, passive managers predominantly opt for index funds, known for their minimal

turnover and enduring value. This portfolio management style promises consistent, long-term rewards at a diminished cost, making it a go-to for novices or those in pursuit of steady growth.

Discretionary Portfolio Management: In Discretionary portfolio management, the investors hand over the reins of their investments to a broker or portfolio manager to efficiently manage their funds, after furnishing the initial funds and delineating their financial objectives., From cherry-picking stocks to finalising trades, the PMS manager takes care of the rest. This service is tailor-made for those who, either due to time constraints or a lack of expertise, prefer not to be actively involved in their portfolio’s day-to-day management. Aequitas offers Discretionary Portfolio Management service.

 Non-Discretionary Portfolio Management: This fund management style is more of a partnership. In non-discretionary portfolio management, the manager only offers insights based on prevailing market conditions and the investor’s aspirations, the ultimate investment decision is the investor’s prerogative. It’s an ideal pick for those keen on retaining a say in their investments while also tapping into professional advice.

In addition to this, PMS can also be categorised further based on other factors such as investment strategy, asset class focus, risk tolerance, and investment goals etc, namely: equity portfolio management, fixed-income portfolio management, balanced portfolio management, sectoral/ thematic portfolio management, value portfolio management, growth portfolio management, alternative Investment Portfolio Management, tax-efficient portfolio management.

Conclusion: A thought through call must be taken by an investor based on the personal investment style , thereby choosing a top PMS in India offering the best portfolio management services.