What are the Four Types of Portfolio Management Services? Portfolio Management Service (PMS) is used to address a financial service where proficient portfolio managers and stock market professionals take care of your equity portfolio with the help of a professional research team. Many investors have equity portfolios in their Demat Accounts but managing them can be a daunting task. Not everybody has the enough time to conduct the market research and find the assets that are suitable for them. PMS offers a methodical approach to maximizing returns while lessening the risk factor on your investments. It allows you to make informed decisions that are backed by comprehensive research and concrete data without doing any legwork. Moreover, it equips you with adequate information that enable you deal with market's ups and downs. These days, you can hire a professional company to get Portfolio as a Service. There are four popular types of PMS which are explained in this section.
Active Portfolio Management: The portfolio manager's immediate objective is to multiply returns. In the Active Portfolio Management method, the portfolio manager tries to decrease the risk of your investments by distributing them across asset classes, enterprises, and corporations. In comparison to the passive style, this can help you reap the benefits of a higher turnover.
Passive Portfolio Management: This method pays attention on specified profiles that are aligned with an existing market trend. In this case, portfolio managers like to invest in index funds which rise passively over time with tiniest intervention. They offer a low turnover but render good long-term returns.
Discretionary Portfolio Management: The portfolio manager is entrusted with managing a distinctive portfolio in this method. As per your goals, risk tolerance, and investment duration, the manager chooses an appropriate strategy that they think is the most suitable for your portfolio.
Non-Discretionary Portfolio Management: In this approach, the portfolio managers recommend you on investing, but the final decision will be up to you. Once you give the permission, the portfolio managers take the proper action on your behalf.