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Debt PMS offers professional management of a portfolio of fixed income securities. Unlike mutual funds, which is a pooled instrument, investors can get personalized investment strategies based on their financial goals and risk appetite.
Debt PMSs invest in government bonds, corporate bonds, debentures and private debt securities ensuring a balanced mix of credit quality and duration.
Cafemutual spoke to industry experts to know more about the opportunities in debt PMS.
Daniel GM, Founder, Director, PMSBazaar is of the opinion that debt PMS gives an opportunity to the investor to personally consult with the fund manager and make a customized portfolio. He said, “The customized portfolio with debt PMS can also include high risk high yield funds or other bonds suiting the risk profile of the investor. Also, there are less regulations around which bonds to include in your portfolio unlike other instruments.”
Deepak Jaggi, Co-Founder and MD, Satco Wealth points out that many HNIs prefer debt PMS to get better risk adjusted returns and regular income. He said, “While the category is less liquid, it can offer 11-16% CAGR in short term. Many investors who invest in real estate are now considering debt PMS to provide stability to their investment portfolio and earn regular income.”
Dhruv Mehta, Founder and Chairman, Sapient Wealth believes that debt PMS gives wide variety of options to choose from in debt category. He said, “Investors looking to explore credit funds have a lot of options in PMS unlike mutual funds which prefer investment in AAA and AA+ rated securities only.”
Mehta said that investors can get exposure to concentrated portfolio. In fact, a few strategies have exposure to only 3 debt securities, which is not possible in other investment vehicles, he added.
Vijay Choudhary, Director, Renaissance Investment Managers said that debt PMS category is popular among ultra HNIs as these strategies offer better returns than traditional mutual funds. However, majority of debt PMS have a lock in period of 5-6 years. So, one needs to be careful before recommending debt PMS, he added.