FAQs

1. What is Portfolio Management Service (PMS)?

Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a professional money manager, and can potentially be customized to suit specific investment objectives of clients.

Unifi is one of India’s leading Portfolio Managers with a ten year performance track-record and with assets under management (AUM) over Rs. 750 crores.

 

2. Who can offer Portfolio Management Services in India?

Portfolio Management Services can be offered only by SEBI registered Portfolio Managers.

3. Who is an ideal PMS investor?

The specialized investment solutions provided by Portfolio Managers typically cater to a niche segment of high net worth clients. These clients can be either Individuals or Institutional entities who require a dedicated investment management service.

The PMS platform is ideal for investors who:

  • Seek to invest in asset classes like equity, fixed income, structured products etc.
  • Value a highly personalised investment management solution
  • Are discerning and appreciate a high level of client service
  • Require investment advice for long-term wealth creation.

4. What is the minimum or maximum investment in Unifi s Portfolio Management Service?

As per SEBI norms, the minimum investment in a PMS scheme is now Rs. 25 Lakhs for fresh investments as well as for fresh investments by existing clients.

At Unifi, there is no maximum investment limit into a portfolio account. Infact, we cater to clients of varying portfolio sizes and our Relationship Managers are equipped to manage individual accounts of a sizeable asset under management (AUM).

5. How is PMS different from Mutual Funds?

Features

Portfolio Management

Service

Mutual Funds

Structure

 
  • Complete ownership of all assets remains with the investor. An exclusive bank account, demat account and brokerage account is opened in the investor’s name.
  •  The Portfolio Manager administers this arrangement on behalf of the investor to implement the investment strategy and allocation the investor has opted for.
  • Each mutual fund scheme will have a pool account in which hundreds of thousands of investors pool together their assets.   
  •  Investment value is based on Net Asset Value (NAV) as published by the mutual fund.

Investment Style

  •   Each investment strategy is very niche and can be implemented preferably across a smaller asset base.
  •   Investment styles can be launched quickly and as soon as the market provides an opportunity - since regulatory clearance is not necessary.
  •   Once the market opportunity recedes, the investment strategy can be wound up and look for alternate choices.
  •  A typical mutual fund will target higher asset base and hence the styles they choose will reflect the same.
  • A MF will have to undergo a lengthy process of regulatory approval before launching a new style.
  • Invariably the style will be continued even after the market opportunity no longer exists.

Investor Service

  • Every investor is assigned a Relationship Manager (RM) who is trained to assist the investor in making investment choices depending on risk tolerance and return expectations.
  • Every investor also gains access to a senior RM with a minimum market experience of 20 years who assumes overall responsibility and accountability of the relationship.
  • MFs are mostly sold through distributors and hence the distributor’s RM transact with the investor.
  • It is operationally unfeasible to assign a senior RM to each and every investor.

   

 
          Investor 
  Interface during
  market volatility
 
  • At the time of sign-up, each investor is provided clarity on accessibility to Relationship Managers as well as the investment management team.
  • While a performance review is done each quarter, during phases of market volatility, an investor can speak with the team to assess the need for action, if any.
  • Since MFs are distributed through distributors, “handholding” at times of market volatility and distress, rests with the distributor who is not part of the investment management function and hence may not be equipped to offer expert advice.

Size

  •  As per SEBI regulations, the minimum investment in a Portfolio Management Service is Rs. 5 Lakhs.
  • Each portfolio manager is allowed to specify their own minimum size above the mandatory limit.
  • The minimum investment in a mutual fund scheme is usually Rs.5000.

Average Client Investment

  • Portfolio Managers cater to a sophisticated investor base - a typical manager will have a few hundred relationships.
  • Smaller numbers of significantly sized relationships allow the Portfolio Manager to maintain high service standards.
  •  Mutual Funds are designed as mass market products where each fund house will have millions of investors with an average of less than Rs.50,000 per client.

        Disclosure

  •  Daily disclosure of portfolio holdings on the same day.
  •  Detailed monthly reports along with market commentary from investment management team
  • Quarterly review by experienced relationship managers and an update on each of the portfolio holdings
  • Only NAV is disclosed on daily basis
  • Individual holdings without cost details are disclosed only once a month along with a fund manager commentary
  •  No stock report on each of the holdings in the fund.

Cost

  • Unifi’s cost structure for its PMS relationships will either be a flat management fee as agreed by the client and/or a performance incentive (charged only when investor return exceeds a predetermined rate).
  •  Unifi does not charge any entry or exit fees to its investors, irrespective of size and tenure.
  • The cost of a MF subscription tends to be high, typically around 2.5% expense ratio irrespective of return to investor.
  • In addition, varying loads will be charged to the investor, depending on size and tenures.

           Liquidity

 

  • The client will receive redemptions within 3 working            days from the request date, either through cash or  securities or part thereof based on the investor’s   choice.
  •  Redemption requests can even be made over an email          quoting the client’s registration ID.
 
  •  Within 3 working days from the redemption date, but only by cash.
  • Redemption shall be made only through the form to be submitted to the registrar.

          Regulation

  •  Regulated by SEBI (Portfolio Manager) Regulations 1993.
  •  Regulated by SEBI (Mutual Funds) Regulations 1996

 

6. What returns can I expect from a Portfolio Manager?

As per the Portfolio Management Regulations prescribed by SEBI, we cannot guarantee a specific rate of return. However, the investment objective of any Portfolio Manager is to outperform the benchmark indices.

At Unifi, each investment strategy has consistently outperformed respective benchmark indices over the years.

7. As an investor, what is the expected time horizon I need to bear in mind?

The ideal time horizon for an equity oriented investment portfolio is between 12-18 months.

8. How often can I view my NAV, positions and transactions undertaken in my account?

Unifi provides each client with a secure account login and password that can be used to access a comprehensive portfolio summary on a daily basis. In addition to the online record of transactions, Unifi also provides its clients a monthly statement of their portfolio.

9. Does the Portfolio Management scheme have any lock-in period?

Unifi’s Portfolio Management platform ensures that there is absolutely no lock-in of a client’s funds. A client is free to redeem or add in part or whole from/to his account with Unifi.

10. What is my tax liability under the Portfolio Management scheme?

The tax liability of a PMS investor is the same as that of an investor who accessed the capital markets by himself. Under the PMS scheme, each transaction will be considered as an independent trade and capital gains will be applied on each transaction depending on the holding period of the stock.

At present, the short-term capital gains tax is 15.66%, while no tax is chargeable on Long term holdings.

11. How do I introduce my initial corpus?

The initial corpus into Unifi’s Portfolio Management scheme can be either in the form of cash funded into an account opened in the client’s name with a designated bank or in the form of securities/shares.

12. What are the documents required for opening a PMS account?

The documents required to enable your Portfolio Management account at Unifi are:
  • Account Opening Form
  • Address Proof
  • Identity Proof
  • PAN Card Copy
  • Bank Account Opening Form
  • Relevant KYC Forms prescribed by the regulator

13. What is the fee structure under the PMS scheme?

Unifi’s PMS compensation is based on two options that a client may choose from:
 
  • A flat management fee as agreed by the client will be charged proportionately on a monthly basis on the funds managed, (Or)
  • A performance based fee, computed as per a pre-agreed proportion of the profit earned over and above an predetermined threshold return.

14. Can I withdraw my profit at any time?

Clients can withdraw their profits at any time, provided they maintain the prescribed Rs. 25Lakh minimum limit for PMS investors.

15. Where will you invest my money?

Unifi’s unique focus on Relationship Management ensures that a RM understands his clients existing investments, risk-return expectations under the PMS scheme, as well as the financial objectives of their investment with Unifi. Subsequently, investment decisions are made in accordance to the objectives that a client outlines periodically.

16. Can NRIs avail of the Portfolio Management Services?

The PMS platform permits investments by all Indian nationals, resident or otherwise. In order to invest through the PMS scheme, NRIs will have to open a PIS account.

17. What is PIS?

In order to invest in the Secondary markets in India, NRIs need to obtain permission from the Reserve Bank of India (RBI). In order to do so, a designated bank account has to be opened under the Portfolio Investment Scheme (PIS) and all transactions related to the investment in the secondary markets need to be routed through this account.

18. Who do I call in case of any queries on my PMS portfolio?

Unifi provides its clients unrestricted and continuous access to its Relationship Managers who interact with clients on a regular basis for day-to-day requirements.

However, in case of any specific requirements that arise, contact details of senior management at Unifi including the Chief Investment Officer are made available in the welcome letter sent to clients.