IIFL PMS

IIFL PMS is a popular service from the full-service stockbroker and financial house in the industry i.e. IIFL.

It is popular for its years of experience with a team of the share market and investment experts who work continuously towards achieving the investment goals of their clients.

Let’s have a deep understanding of this portfolio management services from IIFL and see how this financial house handles it for its clients, what sorts of strategies are applied, the charges levied, and so on.

In case you are looking for such a service, hopefully, this IIFL PMS review will be able to assist you in making a decision.

IIFL PMS Review

IIFL PMS came into existence in 1995 under the leadership of Mr Karan Bhagat. Today, the company is well-known among PMS investors only because of its expertise in the field of Portfolio management service.

The company gives proper management of the funds invested by the clients as its professionals know when and how to invest the client’s fund.

The unique strategies offered by the company attract clients from India as well as from abroad to invest in India’s Growing economy. The deep insights of the company enable the investors to participate in getting a risk-adjusted return.

The strategies enable the portfolio investors to preserve and grow the investment of the clients by minimizing risk and maximizing return. The principles of ‘fundamental value’ form the investment philosophy of the company.

Fundamental value refers to the value creation by capital preservation, a team of active managers who can see the long term prospect, superior research, etc

The company claims that it follows the rule of transparency of charges and the annual management fee is levied. According to the company, the charges are comparatively lower than other PMS houses. 

 

Is this claim true? Well, let’s figure it out!

In this IIFL PMS article, we are going to throw light on all important aspects required to portfolio investors.

The aspects like the types of PMS, PMS Details, Commission/fee model, PMS strategies offered, Manager’s Details, investment plans, benefits, customer support, conclusion, and FAQs.

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IIFL PMS Types 

IIFL offers both discretionary and non-discretionary services to its clients. Apart from these two types of services, the company also offers advisory services to clients.

• Discretionary service
• Non-discretionary service
• Advisory service

Here are the details on the IIFL PMS product:

Discretionary PMS service

In the case of discretionary PMS service, the portfolio manager manages the funds of a client independently according to the provision of the agreement between the manager and the client.

The timing and the required step for the portfolio lie in the hands of the portfolio manager.

The decision of investment or disinvestment is taken by the portfolio manager is final and a client is bound to agree.

Non-discretionary PMS service

In the case of non-discretionary PMS service, the role of the portfolio manager is limited to just advising the client about various kinds of options where the funds can be invested along with the corresponding exit strategies.

Along with that, recommendations and reports are provided on a regular basis with guidance if the client needs such assistance. The client, in this case, is the decision-maker and the portfolio manager takes steps accordingly.

Advisory PMS service

Under this type of PMS service, the portfolio manager advises the client on fund management and other support services.

As the name suggests, the responsibilities primarily stay with the client whose funds are being invested.

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IIFL PMS Strategies Details

IIFL PMS offers various types of strategies based on the customer’s investment profile, risk appetite, and other related factors. The company uses one or more strategies for the fund management of the client’s portfolio.

The first two most important PMS strategies offered by the company are:

• IIFL Multicap portfolio
• IIFL Multicap advantage portfolio

IIFL Multicap portfolio

The strategy focuses on the Multicap portfolio. The objective of the strategy is to generate long-term capital from the investment portfolio of the clients. The strategy searches those stocks which are available at a significant discount price to their intrinsic value.

The strategy opts for a bottom-up approach which includes quality management, reasonable valuation, consistent growth, a strong business model, etc.

There is a fixed position of sectors and stocks in the portfolio and these sectors strategically change according to the change in the business cycle.

IIFL Multicap portfolio is made up of 15-20 stocks from 2-5 high conviction sectors.

IIFL Multicap Advantage portfolio

The Multi-cap advantage portfolio’s main aim is to generate long-term capital appreciation by investing in Multi-Cap stocks. Or we can say it takes large-cap, mid-cap, and small-cap stocks into consideration for the portfolio investment.

The strategy focuses on those stocks which are available in the market at A significant discount to their intrinsic value.

The earnings record of those companies is clearly visible with continuity.

The theme of this strategy is based on the exponential exploration of the Indian economy.

The strategy protects the downside of the investment portfolio by investing in a put option. It is a hedge against the expected market crash.

Investment division of portfolio:

• 94% corpus in Equity investment
• 6% corpus in PUT option, at the money.

Some other strategies offered by IIFL PMS are

1. Emerging star portfolio: This strategy is created for those investors who want to generate long-term capital appreciation by investing in small-cap and medium-cap stocks.

2. Debt portfolio: The focus of the strategy is the growth-oriented portfolio in debt and debt investment for long-term capital appreciation.

3. National development Agenda portfolio: The aim of the strategy is to invest in stocks that are related to the domestic growth story, consumer and financial sector, manufacturing-oriented sector, etc.

4. IIFL Income opportunities PMS: Under this strategy, the investment is made in non-convertible debentures issued by high-quality organizations in the field of finance, healthcare, education, etc.

5. IIFL liquid strategy: The investment under this strategy focuses on investment in structured products/debentures, linked to the equity market and at the same time provides capital protection to the investors.

6. Long term value portfolio: This strategy is fit for those investors who want to invest in large-cap stocks with a view of long-term wealth creation with medium risk and medium return.

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IIFL PMS Performance

The performance of the strategies applied by IIFL PMS is very healthy and superior in class. It has beaten more than 10 years of performance of Mutual funds.

• The 3 years return of IIFL PMS is around 11%,
• It is around 9% of IIFL PMS returns for 5 years,
• IIFL PMS performance of the portfolio for 7 years is 15%.
• Again, the company has given 18% of IIFL PMS return for 10 years and
• 22% return for more than 11 years.

The overall performance of the company is quite attractive to attract more clients to the company.

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IIFL PMS Investment Plans

Investment plans of PMS companies are made for the convenience of each level of investor.

Some investors want to invest a minimum amount in Portfolio management services to save themselves from higher risk while the other level of investor wants to invest a higher amount in PMS to earn a high profit.

Keeping all these in mind,  IIFL PMS created four different investment plans with a different range of investment amounts.

The investment plans are:

• Bronze: ₹25L to ₹50 L
• Silver: ₹50L to ₹1 CR
• Gold:  ₹1 CR to ₹5 CR
• Platinum: ₹5 CR & above

The four plans are Bronze, Silver, Gold, and Platinum. All plans have a different range of investment amounts.

Bronze suits the low-profile investors, who have a low-risk appetite and low financial availability.

Silver & Gold investment plans are for medium-risk appetite investors and Platinum is for the high-risk appetite investors who can invest more than ₹5 Cr and can wait for a long time to get a return.

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IIFL PMS Commission Model

IIFL PMS offers a flexible commission model to the clients so that they can choose the model according to their convenience.

These models are based on different factors like the profit generated out of the portfolio, the total value of transactions completed for the portfolio, and the total asset value.

Following are the commission models offered by the company:

1. Prepaid commission model
2. Volume-based commission model
3. Profit-sharing commission model

1. Prepaid commission model

The prepaid commission model allows the investors to pay the PMS commission in advance to the portfolio manager. On the basis of the total value of a portfolio,  a percentage of commission is charged by the company in advance.

This commission model is preferred by the investors because the percentage of the commission under this model is low. The portfolio manager charges his/her commission in advance so there is a possibility of less effort from their side.

There is a different range of percentage of the commission, charged on the different range of total investment value.

2. Volume-based commission model

Under the volume-based commission model, the charges are levied on the basis of the total transaction completed in a year by the portfolio manager. The total value of the transactions is calculated to decide the amount of commission.

One major drawback of this commission model is that the value of transactions can be increased by the portfolio manager without adding value to the portfolio.

The portfolio manager can do this just to earn a higher commission. So, it is very important that the selected portfolio manager has a good track record.

3. Profit-sharing commission model

The profit-sharing commission model is the best among the other commission models. The commission under this model is charged on the basis of the total profit generated out of the investment portfolio.

Normally, a higher percentage of commission is paid in this model because the client is liable to pay commission only after the realization of profit. If there is no profit, no commission is required to pay.

The percentage of commission decreases with the increase in total profit.

Here is the table which shows the percentage of commission and the range of investment, profit, and volume:

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IIFL PMS Charges

If you are a portfolio investor then you are required to pay PMS Charges in India. The following are IIFL PMS.

Management fee: The fee is charged for the management of the investment portfolio of the client. Normally, it is charged on the basis of the type of commission model opted by the client and the portfolio manager.

Upfront charge: It is almost the same as the prepaid charge. It is paid in advance for the services a client gets from the portfolio manager. It is charged in the range of 1.1% to 2.10% of the total investment amount.

Brokerage charge: This charge is taken by the PMS team of the company. Usually, it is charged in the range of 0.13%-0.43%.

Custodian charge: The company levy this custodian charge in between 0.35%-0.45% of total asset value.

Depository charge: This charge is also taken by the PMS team of IIFL. It is taken in the range of 0.21%-0.31% of total asset value.

Exit load charge: This charge is levied by IIFL PMS when an investor withdraws the amount within a year of portfolio creation. The range of charge is between 1.3%-2.3% of the total withdrawal amount.

On the other hand, if the amount is withdrawn after a year of portfolio creation, the charge is 0.7% of the withdrawal amount and sometimes it is free of cost.

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IIFL PMS AUM

The overall assets under management or AUM of IIFL PMS are around ₹72,000 Crores.

IIFL PMS has collated this amount over a period of time since the day of its inception. From a size perspective, this portfolio management services house can be seen as one of the top fund houses in the country.

IIFL PMS Fund Managers

IIFL PMS has a team of fund managers who collectively manages the different parts of the client’s fund. The two best fund managers at IIFL PMS are Mr. Prashasta Seth and Mr. Aniruddha Sarkar.

Prashasta Seth (Chief Investment Officer)

Presently, Mr. Prashasta Seth manages all the equity funds managed by the IIFL Asset management company. Mr. Seth joined the company in the year 2008 and from that time he is responsible for setting up and growth of the equity desk at the company. 

He has vast experience of 15 plus years in the financial market.

His area of work specialization is creating research reports, investment ideas, and developing investment strategies.

He has completed PGDM from IIM, Ahmedabad, and B.Tech degree from IIT, Kanpur.

Mr Aniruddha Sarkar (Fund manager)

Mr. Aniruddha Sarkar is working as a fund manager with IIFL PMS. He is responsible for generating investment ideas across the sector and different market capitalization to generate a low risk and high return for the clients.

He handles the equity advisory and the PMS desk of the firm.

Mr. Aniruddha has more than 10 years of experience in the same field. He has done MBA in Finance from IMI, New Delhi, and B.COM from St. Xavier’ College, Kolkata.

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IIFL PMS Form

If you wish to download the IIFL PMS form, you can download it by clicking here on this link.

This form will require you to enter a few specific details along with your valid signatures.

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IIFL PMS Benefits

Joining IIFL PMS as an investor is a great opportunity because of the following benefits:

• IIFL PMS has a team of investment experts who are well-qualified and experienced professionals. They work on the basis of the investment philosophy of the company, integrity, value, and trust for the wealth creation of the clients.
• There is full transparency in the charges taken by the company. The annual management fee and other charges of the company is relatively lower than the other PMS companies.
• A wide range of strategies is created by the company to fill the different financial needs and objectives of an investor. All strategies work on a unique basis according to the specific requirement of the client.
• An investor gets an opportunity to select the investment plan and commission model at their convenience.
• Superior customer support by the IIFL PMS team to solve your queries round the clock.

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IIFL PMS Customer Support

Good customer support is one of the most important things required before joining any PMS companies or house. Customer support makes things easy for investors.

As far as IIFL PMS customer support is concerned, the company gives a call and Email support to its clients to ask any type of PMS related questions or any support.

A relationship manager is also appointed by the company to make the relationship between both parties strong enough to continue it for a long time.

A client is also allowed to directly call the portfolio manager. The number of call depends on the value of the portfolio. If you are a high net-worth client then you can call between 1-5 times in a month.

The TAT to resolve any type of portfolio related query is 12 working days.

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Conclusion

The name of IIFL PMS is enough to know its brand image in the financial market. The company offers a lot of strategies that work on different aims of the investors.

The result/performance of these strategies is outstanding and customers are also satisfied with the return they get.

The flexibility of the investment plans is a huge relief to investors. The customer support system is also a great support to the clients.

Having said that, the pricing is an area that can be improved since IIFL PMS can be placed at a more than average pricing range in this space.

Nonetheless, it comes out as one of the good portfolio management service providers in India.

In case you are looking for a promising and high-returns providing PMS service, let us assist you in taking the next steps forward:

 

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IIFL PMS FAQs

Here are some of the most frequently asked questions about IIFL PMS:

What are the two best and the most popular strategies of IIFL PMS?

The two most popular strategies of IIFL PMS are:

• IIFL Multicap advantage strategy
• IIFL Multicap strategy

What is the minimum investment amount for portfolio management services?

According to SEBI guidelines, the minimum investment amount for PMS is ₹25 Lakhs.

What is the guarantee of portfolio performance?

Actually, there is no guarantee of PMS performance/return. The performance of the portfolio depends on various factors of the capital market.

Can an investor add new funds on a regular basis?

Yes, one can add funds through wire transfer or cheque.

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