Explore Key Types of Portfolio Management & How to Choose the Best One
Key Takeaway
Portfolio Management is Strategic, Not Random
PMS is about structured investment planning—balancing risk and reward to meet long-term financial goals, not just picking stocks.
Different Types of PMS Suit Different Investor Profiles
PMS types vary based on investment control (Discretionary, Non-Discretionary, Advisory, Active, Passive) and asset class (Equity, Debt, Hybrid, Multi-Asset).
Discretionary PMS Offers Hands-Free Expertise
Among the top PMS in India, Discretionary PMS is preferred for investors who trust professionals to manage their wealth with minimal intervention.
Active vs. Passive PMS – Risk vs. Stability
Active PMS seeks to outperform the market through active decision-making; Passive PMS follows benchmark indices for stable, market-mirroring returns.
Choose a PMS Type That Matches Your Involvement Style
Whether you seek full control (Advisory), collaborative decision-making (Non-Discretionary), or expert-led strategy (Discretionary), there’s a PMS fit for every investor.
What Is Portfolio Management and Why Is It Important?
Portfolio management is the art and science of selecting and overseeing a group of investments that meet the long-term financial objectives and risk tolerance of an investor. It’s not just about picking stocks—it’s about crafting a strategy that balances risk and reward over time.
Whether you’re an HNI (High Net-Worth Individual) looking for growth or a conservative investor seeking stability, the right type of PMS (Portfolio Management Services) ensures your money works smartly and steadily.
Explore: Important Features of Portfolio Management Services (PMS)
Understanding the Different Types of Portfolio Management
When exploring the types of portfolio management, it’s essential to consider two primary factors:
- Investment Control: Who holds the decision-making authority—you or the portfolio manager?
- Asset Class Focus: What categories of investments are utilized—equities, debt securities, or a combination?
Let’s delve into the different types of PMS based on these factors.
Types of PMS Based on Investment Control
The Securities and Exchange Board of India (SEBI) classifies types of PMS based on the level of control the investor retains over investment decisions. In addition to Discretionary, Non-Discretionary, and Advisory PMS, modern portfolio management strategies also include Active and Passive PMS. Here’s a complete breakdown:
1. Discretionary Portfolio Management Services (DPMS)
In Discretionary PMS, the portfolio manager has full authority to make investment decisions on your behalf, aligning with the agreed-upon strategy.
Key Features:
- Autonomy: Post agreement and funding, the manager handles all investment decisions without seeking your approval for each transaction.
- Real-Time Execution: Swift action on market opportunities without delays.
- Regulatory Oversight: Assets remain in your demat account, ensuring transparency and compliance.
Ideal For:
- Investors prefer a hands-off approach.
- Those who trust professional expertise to manage their portfolios.
2. Non-Discretionary Portfolio Management Services (NDPMS)
In Non-Discretionary PMS, the portfolio manager provides investment recommendations, but execution requires your explicit approval.
Key Features:
- Collaborative Approach: Manager suggests investment ideas; you make the final decisions.
- Client Autonomy: Retain control over your investment choices.
Ideal For:
- Investors who wish to be actively involved in managing their portfolios.
- Those with the time and expertise to evaluate investment options.
3. Advisory Portfolio Management Services
In Advisory PMS, the portfolio manager offers investment advice, but you handle all execution and administrative responsibilities.
Key Features:
- Maximum Control: Complete authority over investment decisions and executions.
- Professional Guidance: Receive expert recommendations to inform your choices.
Ideal For:
- Investors with the knowledge and time to manage their portfolios but seeking professional insights.
- Those who prefer handling execution and administration themselves.
4. Active PMS
Active Portfolio Management involves the portfolio manager actively buying and selling securities to outperform a benchmark index.
Key Features:
- Frequent portfolio adjustments based on market research.
- Aims for higher-than-average returns through stock-picking and market timing.
Ideal For:
- Investors seeking alpha and willing to accept higher volatility and management fees.
- Those who believe in the fund manager’s skill to beat the market.
5. Passive PMS
Passive Portfolio Management aims to replicate a specific index or benchmark by investing in the same securities with minimal trading.
Key Features:
- Low portfolio turnover and typically lower management fees.
- Focuses on mirroring market returns rather than outperforming them.
Ideal For:
- Risk-averse investors who prefer market-average returns.
- Those seeking a cost-effective and transparent PMS type.
Types of PMS Based on Asset Classes
While SEBI doesn’t officially categorize PMS based on asset classes, for clarity, we can consider the following PMS types:
1. Equity PMS
Focuses primarily on investing in equity instruments like listed and unlisted shares and equity-oriented mutual funds.
Risk Profile: High, due to stock market volatility.
Suitable For:
- Investors seeking long-term capital appreciation.
- Those with a higher risk tolerance.
2. Debt PMS
Invests mainly in fixed-income securities such as corporate bonds, government securities, and debt mutual funds.
Risk Profile: Lower than Equity PMS but subject to interest rate and credit risks.
Suitable For:
- Investors seeking stable and predictable returns.
- Those aiming to preserve capital with moderate growth.
3. Hybrid PMS
Combines investments in both equity and debt instruments to create a balanced portfolio.
Risk Profile: Moderate, depending on the equity-to-debt ratio.
Suitable For:
- Investors looking for a balance between growth and income.
- Those seeking diversification within a single portfolio.
4. Multi-Asset PMS
Diversifies beyond traditional equity and debt by including assets like gold, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and other alternatives.
Risk Profile: Variable, depending on asset allocation and investment strategy.
Suitable For:
- Investors seeking broader diversification.
- Those interested in alternative assets to hedge against market volatility.
Read More: What is the Minimum Investment Limit for Portfolio Management Services (PMS) in India
Comparing PMS Types: Which One Is Right for You?
Choosing from the various types of PMS depends on how involved you want to be, your risk appetite, and your long-term goals. Here’s a comparison of the top PMS types—including the most trusted and widely preferred option, Discretionary PMS, offered by Aequitas.
| PMS Type | Investor Control | Decision Making | Ideal For | Risk/Return Potential | Key Benefit |
| Discretionary PMS (Aequitas Focus) | Low – Portfolio manager controls | Portfolio manager executes without client approval | Investors seeking expert-driven, hands-free wealth growth | High – based on manager expertise | Professional expertise & faster market execution |
| Non-Discretionary PMS | Moderate – Client involvement | Manager suggests, client approves | Investors wanting collaboration with professional guidance | Medium – depends on timely decisions | Custom strategy with some control |
| Advisory PMS | High – Full client control | Manager gives advice only; execution by client | DIY investors who want expert inputs but manage execution themselves | Variable – depends on client’s execution | Flexibility with access to expertise |
| Active PMS | Varies – Typically manager-led | Actively managed to beat the market | Investors aiming for high returns and trusting the manager’s market skills | High – higher volatility too | Potential for alpha generation |
| Passive PMS | Low – Index-based strategy | Follows a preset index with minimal changes | Conservative investors preferring predictable, market-linked returns | Low to Moderate – tracks index | Lower fees, minimal volatility |
Why Discretionary PMS is the Preferred Choice Among the Best PMS in India
When evaluating the different types of portfolio management services in India, Discretionary PMS stands out as the most strategic and results-driven option—especially when offered by a trusted and performance-focused PMS fund house like Aequitas.
As one of the best PMS in India, Aequitas’ Discretionary PMS allows seasoned portfolio managers to make timely, research-backed investment decisions on your behalf. This not only removes the burden of active management from the investor but also ensures swift responses to market opportunities—maximizing long-term wealth potential.
If you’re seeking a PMS provider that offers high-quality portfolio management services in India, Discretionary PMS by Aequitas combines professional expertise, custom strategy, and proactive management—positioning it as the ideal choice for investors focused on superior capital appreciation.
The Aequitas Advantage – Why We Rank Among Top PMS in India?
Tailored Investment Strategies
As a leading PMS company, we offer personalized investment strategies—not generic model portfolios. Our fund managers create bespoke portfolios aligned with your financial goals, fostering a one-on-one relationship built on transparency and trust.
Focus on High Margin of Safety
Our Multibagger approach to PMS services in India emphasizes capital preservation through a high margin of safety. We strategically invest in underappreciated opportunities that hold strong long-term growth potential, minimizing downside risk.
Robust In-House Research
Unlike many PMS providers, our investment decisions are powered by proprietary, process-driven in-house research. With zero reliance on third-party data, we deliver data-backed insights that drive performance and reduce risk exposure.
Long-Term, Contrarian Philosophy
Recognized as one of the top PMS in India, our strategy is defined by patience and conviction. With an average holding period of over 5 years and portfolio churn below 20%, we focus on undervalued companies with robust earnings potential and sound corporate governance.
Make an Insightful Investment Decision with Aequitas’ Portfolio Management Services
Conclusion: Picking the Right PMS Type for Long-Term Success
Selecting the right type of Portfolio Management Services (PMS) is a crucial step toward achieving your financial goals. Whether you’re looking for hands-free professional management, collaborative control, or market-tracking stability, there’s a PMS model that suits your investment style. Among the top PMS in India, Discretionary PMS by Aequitas stands out for its proven expertise, research-driven approach, and tailored strategies that prioritize long-term wealth creation. With the right PMS company by your side, you can confidently navigate market complexities and build a portfolio that truly works for you.
