Functions of Asset Management Company

Functions of Asset Management Company

portfolio lio 1. portfo

manage managemen mentt -Por -Portfo tfolio lio

Mana Manage geme ment nt

Serv Servic ices es

account is an investment portfolio in Stocks, Debt and ed income products managed by a professional money manager t!at can potentially be tailored to meet specic investment ob"ectives# $nvestor has the freedom and flexibility to tailor his portfolio to addres addresss person personal al prefer preferenc ences es and and financ financial ial goals. goals. Althou Although gh portfol portfolio io managers managers may oversee oversee hundreds hundreds of portfolios portfolios,, investor‘s investor‘s account account may be unique. As per SEBI guidelines, only those entities who are registered with SEBI for providing PMS services can offer PMS to clients. There is no separate certification required for selling any PMS product. As per the SEBI guidelines, the minimum investment required to open a PMS account is Rs.5 Lacks. Benefits of portfolio management servicesservices•

PMS gives investors access to an institutional process of money management. Provides a customized solution by matching the unique circumstances and

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objectives of each investor. Wealth creation based on disciplined investment process is the crux of PMS. Effective diversification helps reduce portfolio volatility and enhances risk-

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adjusted returns over long term. PMS gives gives inves investor tor direct direct owners ownership hip of the indivi individua duall secur securiti ities es in the

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portfolio

PMS v/s Mutual Fund:

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Both PMS and Mutual Funds are types of managed Funds. The difference to the investor in a Portfolio Management Services over a

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Mutual Fund is: Concentrated Portfolio. Portfolio Portfolio can be tailored to suit the needs needs of investor. investor. Investors Investors directly own

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the stocks, rather than the fund owning the stocks. Difference in taxation

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2. Advisory services -An asset management company gives recommendations and suggestions suggestions regarding investments; investments; where to invest, when to invest, how

to invest, when to sell securities, and so on. Advisory investment managers may either provide asset management services on behalf of corporate investment firms, or directly manage a client’s assets. Hiring good advisory investment managers ensures the efficient management of investor finances and high returns on investments. The advisory role of Amc is utilied mainly against offshore funds, pension, funds, provident funds , venture capital funds , management of insurance funds and above are the main funds under  which Amc performs its advisory role and provide information on the basis of  research conducted in mar!et and past e"perience. An financial consultancy and research conducted by asset management company can be e"changed on commercial basis but such activity should not be in conflict with the activities of mutual fund#. the asset management company can only perform such activity after satisfying the board that the !ey personnel i.e manager or   portfolio manager , office , ban! and securities account are different or  segregated and the Amc have established a system to prohibit or restrict the access of price sensitive information or insider information of such activity in  performing such activity2 . the Amc can perform such function by itself or  with the help of subsidiary established under it $.

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