TATA PMS

TATA PMS is the portfolio management branch of TATA Group. The company is well-established and come under the category of the largest PMS providers in the country.

We will try to cover every important aspect of the portfolio management services provided by TATA PMS from the point of view of an investor.

 

TATA PMS Review

TATA PMS came into existence in March 1994. The branches of the company are present in 80 locations all over the country. The PMS house has distribution tie-up with the major financial institutions in India like IFA, Distribution companies, Banks, online platforms etc.

TATA PMS is the only portfolio management company in the country that follows the excellent business model of the USA i.e. Malcolm Baldrige model.

The presence of the company does not benefit the Indian investors only, but the investors from the country like Japan, the Middle East & Europe are also getting benefits. It manages 4-strategies, especially for foreign clients.

TATA PMS offers an investment solution across asset classes to offer the best return with minimization of risk. The company gives the best investment solution to its clients to meet their specific investment solution.

TATA PMS has a team of professional experts who manages the investment portfolio of their valuable clients according to their risk-bearing capacity and investment objective. They provide them with personalized investment services.

The PMS house serves different categories of clients like High net-worth clients (HNIs), NRIs, and corporate/Institutions. It offers the latest technology that helps through complex portfolio and research analysis.

The company aims to serve their clients by making a strong and long term relationship with them which provides them comfort, confidence and a satisfied client.

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TATA PMS Types

TATA PMS offers two types of PMS services. The first one is Discretionary PMS and the second one is non-Discretionary PMS.

Both services of the company are the best in the industry.

Discretionary PMS: 

In this service, the client decides on the portfolio investment at the full discretion of the portfolio manager. He gives his expert knowledge and experience to offer a better return to the investor. Each step related to the portfolio is taken only after the decision of the portfolio manager.

A client will be informed from time to time about the performance of his investment portfolio.

A portfolio manager will be responsible for the performance of the portfolio. It depends on him whether he wants to add or remove security from the portfolio.

Non-Discretionary PMS:

Non-Discretionary PMS allows the client to take the investment decision related to his/her investment portfolio. A portfolio manager is only responsible to give their expert idea to the client related to portfolio investment. But, that will be the client who takes the final decision of the portfolio.

Under this service, a portfolio manager works as a trader only who execute the trade on the order of the client.

So, you need to decide which PMS type you’d want to go ahead with while using the services of Tata PMS.

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TATA PMS Fund Managers

The portfolio manager is the backbone of any PMS companies in India.

The return offered by a company to its investors depends on the experience and expertise of its portfolio manager. So, it is very important to have a team of expert portfolio managers with the company.

TATA PMS has one of the best portfolio managers who is famous for his extraordinary performance in the PMS world.

Danesh Mistry (Head of PMS):

Tata PMS appointed Mr Danesh Mistry as the head of portfolio management service to provide an expert service to the investors and strengthen the division (Which offers tailor-made portfolio management service to the investors).

Mr Danesh has acquired 16 years of experience in the field of equity research, fund management, investment banking, mortgages, capital market, etc. He has managed various types of investment portfolios also.

He has more than 9 years of experience with TATA Asset Management. Now, he is associated as PMS Head.

Before joining the PMS house, he worked with HDFC and ENAM Securities.

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TATA PMS Strategies Details

Tata PMS offers multiple investment strategies to the clients to achieve their investment objective and risk minimization. The PMS investment risk is reduced by following the below strategies that is offered by TATA PMS:

• The portfolio of investors is created according to the theme selected by them.
• Macro analysis is done to arrive at a long-term sectoral investment decision.
• The investment portfolio is created based on the ideas filtered after macro analysis.
• Regular monitoring of the investment portfolio in order to take the right step at the right time.

Following are the three PMS strategies offered by TATA:

• Blue-chip portfolio
• Emerging opportunities portfolio
• Consumption portfolio

Let’s start the details of each investment strategy one by one:

1. Blue-chip portfolio:

Investment objective: Blue-chip portfolio is created with the aim to generate capital appreciation by risk minimization for the long-term investment.

Characteristics:

Following are the characteristics of a ‘Blue-chip portfolio’.

• Those companies have gone through multiple business cycles.
• Companies that are the leader in their sector/industry.
• A strong and long track record of the management of the company.
• Parameters are fundamentally strong.
• Investment portfolio created with the stocks of attractive valuation.
• The Portfolio is made up of large-cap and mid-cap companies with a higher proportion of large companies.

The investment portfolio is managed in the conservative style across various sectors/industries of the Indian economy.

The portfolio under the strategy is the open-ended type and the performance of the portfolio is measured against the benchmark ‘BSE SENSEX’.

The investment time horizon is a minimum of 2 years.

The investment limit in the portfolio for a single stock is 10% and in a single sector is 30%.

2. Emerging opportunities portfolio:

Investment objective: The aim of the emerging opportunities portfolio is capital appreciation with a relatively higher risk in the long term of the investment.

Characteristics:

Following are the characteristics of the Emerging opportunities portfolio.

• Those companies whose scale of operation will be able to see large growth in the future based on the opportunities provided by their sector.
• Capability and bandwidth of the management to capture the opportunities.
• Companies that have the possibility to become a future blue-chip company.
• There is no strict rule for market cap, it can be mid, and small-cap companies.

The strategy follows the investment style valuation parameters. The investment is made in those companies which are available below the intrinsic value in the market.

The portfolio under this strategy is an open-ended type and the performance of the portfolio is measured against the benchmark ‘BSE 200’.

The minimum suggested investment time horizon is 3 years for getting a better return.

The risk is controlled under the strategy by making 10% of investment in a single stock and 30% investment in a particular sector or portfolio.

3. Consumption portfolio:

Investment objective: The goal of this strategy is capital appreciation in the long-term by giving priority to equity and equity-related instruments’ investment that captures the fastest growing consumption story of the Indian economy.

Characteristics:

Following are the important characteristics of the Consumption strategy.

• The portfolio captures those stocks in the portfolio that comes under the effect of transformation change of the Indian economy on the basis of rural demand, fast urbanization, change in demographic profile, etc.
• The consumption theme captures the stocks which have a wide sectoral/industrial scope. It includes sectors like healthcare service, educational service, Durable & non-durables, retailing, Media & Entertainment, etc.
• Companies that come under a sustainable competitive advantage and has a good brand name in the market.

The investment style of the strategy is to invest in those companies which can offer sustainable stakeholder value and capture the Indian consumption opportunities.

The investment type of the strategy is Open-ended type and its performance is measured against the benchmark S&P CNX Nifty.

The minimum investment time required is 3 years.

The internal risk of the portfolio is captured by limiting a stock investment up to10% and in a single sector up to 35% of the portfolio.

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TATA PMS Performance

TATA PMS offers an outstanding return to its investors by minimizing the associated risk with the portfolio. Here we are going to discuss the performance of all the three strategies against their benchmark since their inception.

The below-mentioned table depicts the absolute return of strategy against the benchmark:

We can see, how the company has offered attractive portfolio management services returns to the investors since its inception. These performances are based on the model portfolio created using a time-weighted rate of return. It is not guaranteed that the future performance of the portfolio will be in line with past performance.

It changes according to market opportunities.

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TATA PMS Investment plans

TATA PMS offers four types of investment plans to their customers. All plans have a different investment slab. A client can choose any plan according to their convenience.

The investment plans are Bronze, Silver, Gold, and Platinum.

1. Bronze: This plan is best for those investors who want to start the investment with a minimum amount in the portfolio investment and they just want to take the minimum risk. The investment range is Rs.25,00,000 to Rs.50,00,000.

2. Silver: The second plan offered by TATA PMS is Silver. The investment range under this plan is Rs.50,00,000 to Rs. 1.Cr.

3. Gold: The name of the third investment plan is Gold. If you want to invest somewhere between 1 Cr to 5 Cr, you can choose this plan.

4. Platinum: The last investment plan is Platinum. If you are ready to take the risk to get a high return over a long period.

Platinum is the best investment plan for you. As you can invest above 5 CR through this plan.

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TATA PMS Commission model

The commission model offered by TATA PMS allows you to choose a commission model as per your preference and convenience.

They offer three categories of commission model, the first one is volume-based, the second one is prepaid and the last one is profit-based commission model.

Let’s discuss all three models in detail:

Prepaid commission model: 

This model is best for you if you are ready to pay PMS commission in advance before getting portfolio service. Under this model, you will have to pay a certain percentage (Fixed by a client and the portfolio manager mutually) of the value of the portfolio created.

You will not be liable to pay a higher commission based on the profit earned by you or something else. It will be fixed.

Generally, the percentage of commission in this model is low in comparison to other models.

Volume-based commission model:

The volume-based commission model is the second type of commission model. In this model, the commission is paid on the basis of the total volume generated by the portfolio manager within a year.

If the volume of transactions will be high, the percentage of commission will also be higher and vice-versa.

Profit-based commission model:

Total profit generated out of the investment portfolio will be the base for the commission in this model. A fixed percentage of commission will be charged on the basis of the total profit generated. The percentage of commission varies according to the slab of investment.

Here is the percentage of commission for all three models:

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TATA PMS Charges

The portfolio management company charges various types of other fees from the investors for the services they offer to them which is called PMS Charges.

TATA PMS also charges fees from their clients for the following:

• PMS Management fees: The company charges management fees for the services they render to the investors. They charge @2.50% per annum/quarterly on the basis of average AMU.
• Termination fee: The company takes this fee if an investor withdraws their portfolio amount. They charge 2% of AMU, if the termination is done within 0-12 months of portfolio creation, for 12-24 months, the charge will be 1% of AMU, and for more than 24 months there will be no charge.
• Partial withdrawal fees: NIL (Any withdrawal above the capital amount).

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TATA PMS Benefits

TATA PMS will offer the following portfolio management services benefits to you if you avail of its services:

1. Professional management: The company offers professional portfolio management services with a risk-adjusted return to the clients.

2. Risk control system: The risk associated with the portfolio is well-managed by the management platforms created by the company without human intervention.

3. Portfolio tracking: The investment portfolio of the clients are tracked by the experts of the company on a continuous basis so that the necessary action can be taken before suffering from a huge portfolio loss.

4. Convenience: Investors can easily access their portfolio performance through the login Id provided by the company. They need not remain in darkness related to their investment portfolio.

5. Dedicated relationship manager: The company appoints a dedicated relationship manager for the investors who help them in making the relationship strong between the company and the clients.

6. Multiple strategies: Various types of strategies are offered by the company to clients. The portfolio manager, as well as the investor, chooses the strategy according to their risk appetite and investment objective.

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TATA PMS Customer support

If the customer support provided by the company is good enough, the investors will feel convenient while dealing with the PMS company.

TATA PMS also provide effective customer support to the investors.

A Client can easily access their account with the Id and password provided by the company to the investors on a daily basis.

Investors also get the fund manager’s commentary on a monthly basis. Not only this, a magazine containing all data related to the macroeconomy is sent to the clients on a daily basis.

An in-house book is also provided to the clients on investor’s education. The book is sent to them after joining to TATA PMS.

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TATA PMS Conclusion

TATA PMS is among the best portfolio managers in the country. The company offers customized investment strategies to the investors according to their investment objective and risk appetite.

It also offers superior customer support with a lot of options to communicate with the company.

The charges are affordable while investment plans and the commission model are also in line with industry and created according to the comfort of the clients. The portfolio managers and analysts of the company work 24 hours to catch the opportunities that arise in the market.

The brand name of the company is another big reason to attract the client for the long term. So, if you are ready to invest your money in the PMS, you can choose the TATA PMS service without any hesitation.

Nonetheless, if you are still confused about which PMS to go ahead with, let us assist you in taking the next steps forward.

Just fill in some basic details to get started:

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TATA PMS FAQs

Here are some of the most frequently asked questions about Tata PMS that you should ideally be aware of in case you are looking to invest using its portfolio management services:

1. What are the strategies of TATA PMS?

The company offers three customized investment strategies which are:

• Blue-chip portfolio
• Emerging opportunities portfolio
• Consumption portfolio

2. Is a client allowed to add a new fund at any time to their portfolio?

Yes, a client can new fund to his/her investment portfolio at any time.

3. Is there any partial withdrawal fee levied on investors?

TATA PMS does not charge any fee on partial withdrawal.