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While many fund managers believe that large cap stocks are currently undervalued compared to small and mid cap companies, the panel comprising industry stalwarts like Raghav Iyengar, CEO, 360 One Asset, Sameer Shah, Co-founder, Value Quest Investment Advisors and Saurabh Mukherjea, Founder & CEO, Marcellus Investment Managers believe that quality large cap companies are available at attractive valuations.
Prem Khatri, Founder & CEO, Cafemutual moderated this panel at the CafeAlt Conference 2024.
Here are other key highlights of the session:
Talking about PMS, Raghav said that PMS is a tailor-made product and more flexible when it comes to regulations. It is also a product that gives access to a fund manager to his client’s demat account, which no other product gives.
While answering whether PMS gives better returns due to customized portfolio, Sameer said that PMS should be looked at as a service, not a product. PMS is a personalized service, which offers a lot more than returns as it contributes to a client’s lifestyle and financial independence. He believes that returns are dependent on both client and fund manager’s decisions.
Discussing performance metrics of PMS and their transparency, Saurabh said that the regulations by SEBI in 2020 has made the performance monitoring uniform and reliable. Besides that, benchmarking is also done.
Sharing how this has translated into investor confidence, he shares that discretionary PMS AUM without EPFO has increased from Rs. 2.70 trillion to Rs. 6.70 trillion in FY24 showing the increasing interest of investors in PMS.
He also said that a sophisticated asset management industry and good regulations are a tribute to the ingenuity of the Indian financial services sector.
Raghav adds that GIFT City has opened new avenues for Indian investors to invest in foreign markets for a more diversified portfolio.
Talking about opportunities in debt PMS, Raghav said that there are great opportunities but there are also many operational challenges including agreement among investors for a single portfolio.
When it comes to curated portfolio in PMS, Sameer said that a personalized portfolio separates PMS from MF in terms of returns and outperformance. He also believes that AIF offers a better structure for a model portfolio-based investment.
Raghav believes that the biggest disadvantage of PMS is charges for churn, so curated portfolios don’t make sense for small ticket size.
While talking about onboarding, all panellists agree that the digitization and investor friendly regulations have made onboarding smooth in PMS. The switch between portfolios is also simple.