|
What are the advantages of investing in PMS vis a
vis Mutual Fund?
• You have greater control over the asset allocation, whereas it is automatic
in a Mutual Fund.
• The Portfolio can be customized to suit your risk-return profile.
• The Portfolio Manager has relatively greater flexibility to move in and out
of cash as and when required depending on the market view.
• Typically, charges are lower and more transparent in PMS vis-a-vis a Mutual
Fund.
[Top]
Do you pay dividends akin to a Mutual Fund?
Under the Portfolio Management Service, we do not pay any dividend to you. But
if the companies in which we invest declare dividend, then the proportionate
dividend will be allocated to you based on logical holding. This dividend shall
be tax-free in your hands. You have option to withdraw partially (subject to
residual corpus not going below the minimum stipulated sum)
[Top]
Do you have the facility of a Systematic Investment/ Withdrawal
Option?
You can make contributions/withdrawal subsequent to the initial corpus at
regular intervals at your discretion. You have option to withdraw partially
(subject to residual corpus not going below the minimum stipulated sum)
[Top]
Do you charge any entry or exit load akin to a Mutual Fund?
We do not charge any entry or exit load. Our charges are transparent and are
described in the documentation at the time of entering the scheme.
[Top]
What is the difference between a discretionary and a
non-discretionary Portfolio Management Services?
The discretionary portfolio manager independently manages the funds of each
client in accordance with the needs of the client in a manner, which does not
partake to character of a Mutual Fund. The client does not have any say over
the decisions taken for the management of his/ her portfolio. On the other
hand, the non-discretionary portfolio manager only provides advisory services
to the client where the client retains the decision-making powers in the
portfolio. At present we offer only Discretionary Portfolio Management Service.
[Top]
Do you guarantee the initial corpus and any ‘return’ thereon?
As per regulations governing Portfolio Management Services in India, neither
capital nor returns can be guaranteed.
[Top]
What is your investment philosophy?
We invest as per objectives of a particular scheme. We typically pay more
attention to a company’s fundamentals, valuations and technical trends and
lesser weightage to macro factors. Our portfolios do not mimic indices and are
more governed by the bottom up approach.
[Top]
Does the Portfolio Management Service have any lock-in period?
The Portfolio Management Service has no lock-in period and you can make
withdrawals by simply putting in a request for the desired amount. It is
however, prudent, to specify the minimum period for which you are willing to
invest at the time of signing the agreement. This will enable the portfolio
manager to design the portfolio in accordance with your needs. It is also
advisable to keep any equity portfolio invested over a longer term because in
the long run, equities outperform most other asset classes.
[Top]
What is the Minimum Size of Portfolio?
As per SEBI regulations, the minimum size of the portfolio is Rs. 5 lacs.
[Top]
Is there a maximum limit for investing in the Portfolio Management
Service?
There is no upper limit on the amount you can invest in the Portfolio
Management Service. But there could be restrictions on the maximum limit under
certain schemes.
[Top]
How can I introduce my initial corpus?
Initial corpus can be brought into the Portfolio Management Service by way of
Cheque and/ or securities/ shares. The initial portfolio of securities/ shares
will be re-aligned as per the model. We sell shares as required to get the
holdings re-aligned as per the model portfolio.
[Top]
At what frequency, can I see my NAV, positions and transactions?
You can check your Net Asset Value (NAV) on a daily basis by logging on to our
website. In addition, you get monthly statements of transactions, holdings etc
typically within 15 days of the ensuing month. You can also access these
reports online.
[Top]
What reports do I receive on my portfolio account?
All Portfolio Clients will receive the following reports on a fortnightly
basis:
• Performance Summary of Portfolios
• Holdings statement
• Realized gain/ loss statement
• Half yearly Review Report
In addition all portfolio clients will also have access to the website as
mentioned earlier where they can view their portfolios online.
[Top]
Can I specify limits, upper and/or lower for the NAV at which my
account should be automatically terminated?
In the current schemes, no such limits can be specified. However at any time
you can make a request for a withdrawal, either partial or full.
[Top]
What is the Fee Structure of PMS Schemes?
Under our schemes we charge Performance Fees which comprises of
1. Management Fees and
2. Profit sharing
To know more on the fee structure you can get in touch with our relationship
manager.
[Top]
Why should I pay performance fees?
Performance fee is charged for two reasons:
1. Any PMS Scheme has an inherent cost structure, which is taken care of with a
defined fee structure. Our fee structure is designed to ensure that a larger
part of the fee is charged subject only to the performance of the fund.
2. World over, portfolio managers operate on a fee based model comprising a
fixed retainer and a share in profit. It also incentivises the Portfolio
Manager since they have a stake in the profitability of the portfolio.
For the purpose of performance fees, profit will be considered as Net Profit
after all charges like management fee, brokerage, and custody related charges
etc are taken into consideration.
[Top]
How are the shares held under the PMS scheme? Are they held in
each individual’s account or with a custodian?
Networth Stock Broking Limited (the Portfolio Manager) has a custodial
arrangement with its own Demat Division wherein all the shares pertaining to
the relevant scheme will be kept in a pool account opened in the name of the
relevant scheme. The breakup of the shares held in each individual account will
be provided to the client in the Holding Statement.
However it depends on the Scheme – If you enter into pool scheme then the
securities will be held under the pool DP and if you enter in a Non-pool scheme
then the securities will be held in your name.
In case of NRI clients however, a separate DP account will be opened for each
client as per the SEBI guidelines.
[Top]
Can I specify investments that I want or don’t want to hold?
In Case of Discretionary Portfolio Management Services, the discretion to
invest primarily lies with the Portfolio Manager. Any securities/ shares handed
over as initial portfolio will be aligned to the model. Therefore, it is
advisable that you should hand over only those securities/ shares, which you
are willing to sell and retain the ones you want to hold.
[Top]
Do you invest in IPOs?
If the Portfolio Manager finds any IPO, which presents a good investment
opportunity then the Portfolio Manager will invest in the relevant IPOs.
[Top]
Do you invest in Derivatives (Futures/Options)?
Under SEBI guidelines, a Portfolio Manager is allowed to invest in the
Derivatives Segment only to the extent of the value of the portfolio. This has
also been mentioned in the Disclosure Document and clients are advised to read
it carefully before investing. However, our policy will be to use Derivatives
more as a hedging strategy.
[Top]
Do you invest in debt instruments? What proportion?
While the Schemes allow investment in debt instrument, most of the portfolios
are invested in the equity markets. In the Customized Scheme, however, only
after having decided the asset allocation based on the risk/ return profile of
the client will the portfolio be invested accordingly which could also include
debt instruments in the proportion best suited to the client’s risk-return
profile.
[Top]
Do you indulge in day trading under the Portfolio Management
Service?
SEBI guidelines forbid any day trading activity by Portfolio Managers.
Therefore, we will not indulge in any day trading activities under the
Portfolio Management Our Portfolio Management Service. Moreover, Schemes are
designed from a long term perspective and we will invest in accordance with the
objectives of each Scheme. It is advisable to keep any. Equity portfolio
invested over a longer term because in the long run, equities outperform most
other asset classes.
[Top]
Will Networth share the losses?
As per the current Portfolio Management Scheme guidelines, no portfolio manager
can legally share losses. Portfolio managers generally, operate on a fee based
model comprising a fixed retainer and a share in profit and no share in losses.
Equity investments are always subject to market risk which all clients should
be aware of before investing in any PMS scheme.
Performance fees are charged only when the value of the portfolio goes beyond
the previous profitable portfolio when performance fees were charged and so on
and so forth.
[Top]
Whether the T.D.S. has to be deducted on the Management Fees?
It is the responsibility of the Client to deduct and pay T.D.S. to the
Government Authorities
[Top]
Do I need to have Permanent Account Number?
A Permanent Account Number (PAN) has to be provided for investment in the PMS
scheme.
[Top]
What are the tax implications of investments in PMS?
Under the Portfolio Management Scheme, each transaction scheme will be
considered as an independent trade and capital gains will be applied on each
trade depending upon whether the relevant stock was held long term or short
term. Presently 10% tax is chargeable for Short Term Capital Gain and no tax is
chargeable on Long Term Capital Gains. In addition the relevant STT charges
will also apply. The Tax applicability would also be governed by individual
states, business, other investments etc…We advice you to take your tax advisors
opinion before investing.
[Top]
Will I receive Contract Notes/Bills? How are the transactions
executed under the Portfolio Management Scheme?
Under our PMS Schemes there are two Kinds of schemes –
1.) Pool Scheme and
2.) Individual Scheme
If you are under a pool scheme then all transactions in each individual stock
are pooled together for execution and then allocated to individual clients at
the end of the day on the weighted average cost (as allowed under SEBI
guidelines). This ensures that all clients get the benefit of a uniform rate to
avoid discrepancies in portfolio performance. Since individual contracts cannot
be generated under the pool system, portfolio clients will not receive Contract
Notes/ Bills. The Portfolio Manager gets contract notes/ bills from the broker
for the entire portfolio, which can be verified by any client with prior
notice. However, as specified earlier, they will receive monthly Transaction
Statements, which will enable the clients to see the transactions done in their
respective accounts. Furthermore, we at Networth give a chartered accountant
certified accounts statement, details of all transactions, dividend, short
term/ long term gains etc to meet accounting and tax requirements of clients
If the client is under Individual PMS scheme (i.e. PMS in clients’ name rather
than pool system) then all the transactions will be in your name and the
securities will lie in your name in the Demat account opened with us. Also the
contract bills/notes would be in your name
[Top]
Do you book losses and exit long positions?
We do so in a situation where the rationale and the assumptions behind our
investment idea diluted or non- existent.
[Top]
What is the paperwork and documentation needed to open a PMS
account?
Documents required:
1. PMS Agreement.
2. Documents mentioned in the Form (as per KYC norms)
[Top]
Can I open a joint account?
A Joint Account can be opened under the PMS scheme. And a nomination facility
is available whereby the account holder can specify the nominee.
[Top]
What is the safety of clients’ portfolios with Networth Stock
Broking Limited?
The company does not indulge in proprietary trading. The company is
professionally managed by a team with an impeccable track record and is a
profit making entity thereby lending safety to the customers’ money.
[Top]
Can we withdraw securities lying in our portfolio?
You can make subsequent withdrawal even of securities at regular intervals at
your discretion.
[Top]
Do I need to keep all the records of the day to day transactions?
No, you need not keep the day to day record of the transactions. You will be
provided with monthly reports of all the transactions we carry out.
[Top]
Whether unapproved scrips in the portfolio will be accepted?
As long as the scrips are liquid enough and are saleable in the market, the
portfolio will be accepted, else not.
[Top]
|