Broking houses will still pamper you with PMS

MUMBAI: ���It���s not all about earning money in bagfuls; it���s where you invest in. There is nothing like having a relationship manager calling you once in a month to brief you where your investments are headed,������ said 27-year-old Sandeep

More, a middle-level management professional, who has invested close to Rs 6 lakh in portfolio management services (PMS). Sandeep is among many young aspirational professionals in the country who have graduated from bank accounts to equity markets and then to PMS, thanks to their ever-expanding pay packets.

Trashing the belief that customised investment products are only for ���cream��� high net worth individuals, broking houses have begun dishing out portfolio schemes to young and savvy ���working class��� investors (also called retail investors) with adequate investible sum of money. The coming months will witness the influx of a plethora of small-ticket portfolio products in the market.

���Thanks to rising income levels, customised investment products are becoming increasingly affordable to retail investors. Short and focused funds would be of great demand in the coming days,��� Akhilesh K Singh, business head - wealth management & distribution services, Emkay Share and Stock Brokers.

The brokerage recently launched a ���small & mid-cap portfolio��� in the PMS segment with a lock-in period 18 months. Emkay expects to mobilise up to Rs. 50 crore to invest in stocks belonging to the small- and mid-cap space with a market capitalisation of less that Rs 7,500 crore, with an option to invest up to 15% in large-cap stocks.

���This is a small-ticket PMS with an entry load of Rs 5-10 lakh. This offering is directed at retail investors with long-term view on their investments,������ said Mr Singh, adding, ���the segment is hotting up with more players planning portfolio schemes.���

According to fund managers, investors in small-ticket PMS are generally between 25 and 35 years of age. A large portion of them are management professionals with an average annual income of Rs 10 lakh. Most of these young investors park their money with a long-term view. Risk appetite is, however, very high in these investors.

���We have specialised products for retail investors who are only interested in equities. Many of them (investors) even suggest sectors or stocks for parking their investments,������ said Shashank Khade, head - PMS, Kotak Securities. Kotak is planning to launch some close-ended portfolio schemes for retail investors in the coming months.

It takes an investment of Rs 10 lakh to have a decent portfolio. Such ���folios��� will have an array of mid-cap stocks, derivative instruments and some large-cap stocks. Cost to make an investment portfolio for retail investors will be a bit more higher than the usual big-ticket PMSs.

���Retail investors are to be literally hand-held at each and every phase of the lock-in period. They need more reports, reviews and personal meetings to understand the investment strategy. Retail investors also ask us to churn their holdings a lot more than other cream investors. Management fee is a bit more in PMSs for retail investors,��� said a fund manager.