The assets under management of PMS has reached Rs.3.50 lakh in February 2017 excluding EPFO and PF contributions, shows the latest SEBI data.
If we include contribution from EPFO and PFs, the overall AUM has reached Rs.12 lakh crore as on February. Since last year’s data on EPFO and PF contribution in PMS is not available, the entire figure has been taken for comparison.
Portfolio managers have witnessed a healthy growth of 17% i.e. from Rs. 10 lakh crore in February 2016 to Rs. 12 lakh crore in February 2017.
The growth has come largely on account of growth of assets in non-discretionary under PMS.
SEBI data shows that portfolio managers witnessed 28% growth in non-discretionary assets. In non-discretionary PMS, a fund manager cannot execute transactions without the prior permission from investors. Simply put, investors have a say in stock selection. Most banks and national distributors prefer non-discretionary PMS as it provides better transparency and flexibility for investors.
Advisory services assets have witnessed a flat growth in the last one year. Advisory services under PMS include onshore and offshore advisory services where portfolio managers provide investment advisory services to their clients.
Meanwhile, discretionary assets grew by 19%. A large chunk of discretionary assets comes from EPFO and PFs. Of the Rs. 9.50 lakh crore AUM under discretionary PMS, EPFO and PFs have contributed nearly Rs. 8.40 lakh crore.
Compared to mutual funds, PMS gives more flexibility to AMCs. AMCs can charge a higher fee and enjoy a broader investment mandate.
Since the minimum investment amount in these funds is Rs. 25 lakh, such products are primarily meant for HNIs.
