Karvy PMS

Karvy PMS is the portfolio management branch of Karvy Group. As a customer of Karvy PMS, one can get customized Portfolio Management Service which comes under one of the premier PMS service providers in the country.

The expert team of Karvy PMS helps the customers to achieve their investment objective through their extensive and unique way of research.

Karvy PMS Review

Karvy PMS was established in the year 1985 and its headquarter is in Hyderabad, Andhra Pradesh. Phani Sekhar Phonangi was the founder of the company.

If you are a high net worth customer and want a personalized service of your finance through portfolio management service then you are at the right place. Karvy PMS provides customized service to high net worth (HNI) individuals so that they get to achieve their financial goals in a given time.

The customized service ensures the opportunity of maximum return within a selected asset class and a chance active monitoring of portfolio for the best result.

The company always tries to provide the best service in its field so that the customer can multiply their funds in a safe way. The expert research team of Karvy PMS extracts the most relevant information from the market which can help in smooth portfolio management service.

The strategies used by the Karvy PMS are very effective and has a successful track record. Customers are allowed to track their portfolio whenever they want.

Karvy provides PMS service in both Debt and Equity.

 

In this article of Karvy PMS, we are going to discuss different aspects of the company like its manager’s details, PMS offer types, strategies used by the company, different commission model, benefits of Karvy PMS service, investment plans, customer support, PMS charges and finally we will talk about some of most frequently asked questions.

Let’s start our discussion with the types of PMS service offered by the Karvy.

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Karvy PMS Types

Just like other PMS companies in the industry, Karvy also offers two types of PMS service to their clients. One is Discretionary and another is non-Discretionary PMS service.

Discretionary PMS: In this type of PMS, the client is not allowed to make any intervention in the process of investment. The whole right and responsibilities lie on the shoulder of the fund manager.

Non-Discretionary PMS: This is the second type of PMS. In this type of PMS service, the whole responsibility of portfolio management lies with the investor only.

The portfolio manager suggests the idea of investment to the client and it depends on the client what decision they want to take. The choice and the investment timing are decided by the client. However, the fund manager executes the trade.

So at Karvy PMS, a customer has both the options, either to manage their funds by themselves or leave it to the fund manager.

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Karvy PMS Fund Managers

Phani Sekhar Ponangi:

He is the fund manager at Karvy PMS. Mr Ponangi has 12 years of experience in the field of the Indian equity market in both equity and debt markets. He has 7 years of experience as a fund manager with Angel Broking. He successfully provided a mid-cap portfolio return there.

As far as his educational qualification is concerned, he holds the MBA (Master in business administration) degree and Engineer by training (BE-Mech Engg.) degree. Again, he has completed CFA (Chartered Financial Analyst) and the CAIA (Chartered Alternative Investment Analyst).

One can easily see Mr Ponangi on several TV or news channels like NDTV Profit, Bloomberg TV, Zee Business, CNBC TV18, CNBC Awaaz, and ET Now.

Kedar Deshpande: Special Invitee

Kedar Deshpande works as a Director at Karvy Capital business. Worked as country head at Karvy Online broking Ltd before this. He has more than 19 years of experience in market research and retail broking. He was also the retail business head of ICICI direct and served the treasury desk of the same company.

Mr Deshpande started his career with the largest market research company named ORG-Marg (AC Nielsen). He holds an MBA degree from Pune University.

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Karvy PMS Strategies Details

As we have discussed above, Karvy offers PMS service across two asset classes that are Debt and Equity. For both assets, Karvy has different types of PMS strategies which helps in getting the maximum return from the investment in these assets.

Debt PMS:

Debt PMS refers to high yield portfolio. In this type of PMS, the research team of Karvy tries to research most progressive, emerging and promising businesses to invest the money of its clients. By trading in the secondary market, the aim of the company is to generate high yield income on the long term benefit basis.

Actually, the main objective of Debt PMS is to appreciate your income and provides you with long term capital benefit.

Debt PMS offers two types of products:

Excel:

It is a mid-yield debt product. Under this product, priority is given to the income generation not to the capital appreciation through the allocation of the asset to the debt.

This is a mid-cap strategy which focuses on income generation for the clients instead of capital appreciation.

Excel is suitable for those investors who want a moderate-income over a long period of time and for those also who have the capacity to bear the low-moderate risk.

Excel invest in those securities only which has the investment-grade credit rating and above.

As per SEBI rule, the minimum investment in PMS amount is ₹25,00,000 and the product use 5-year SBI FD scheme as the benchmark. The approximate rate of return is 6.25% but, Karvy targets to return 6-8%, more than FD of SBI.

Now, the main point is What makes ‘Excel’ different?

• It provides a scheduled monthly income to the investors.
• Moderately higher yield than many bank’s FD.
• Invest in diversified securities to minimize the risk.

Demeter: Under this product, the focus is on income and capital appreciation through the allocation of an asset to debt. It is a high-yield debt product.

Demeter is suitable for those investors who want to get a high return over the long period of time and for those also who have moderate to high risk-bearing capacity.

The minimum investment amount is as per SEBI rule i.e. ₹25,00,000 and the product uses 5-year SBI FD as the benchmark for the yield. Karvy provides 6.25% with an approximate return, aims at 8%-11% return which is more than SBI FD.

Demeter invests in both rated and unrated securities such as preference shares and Non-convertible debentures

What Makes ‘Demeter’ different?

• Higher return than Bank FD.
• Scheduled income to investors after every quarter.
• An Instrument to minimize risk.

Equity PMS:

In Equity PMS, two types of strategies are used by Karvy PMS named Gamma portfolio and Alpha Plus:

Gamma Portfolio:

Under this strategy, those companies are selected which are fundamentally strong and comes under mid-cap companies.

Risk is minimized by investing in diversified securities, sectors, and economic themes. Fund managers select those companies which are most expected to give a better return with the help of their strong analytical skill.

Alpha Plus:

This is the second strategy used by Karvy in its Equity PMS. Under this strategy, superior stocks are selected to add in the portfolio by diversifying across the sectors.

Fund manager uses the top-down approach (From top to down priority stocks) for the stock selection based on high research within a particular sector.

As we have discussed different strategies used by Karvy PMS for different asset classes. Debt PMS uses three types of strategies for the portfolio management service and Equity PMS uses two types of Strategies for the same.

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Karvy PMS Returns

Karvy PMS is not behind in the race of a good performing PMS house. As every client expects a good return from their investment and that’s why they search a trustworthy PMS house and a fund manager.

Here we will discuss the performance/portfolio management services returns of Karvy PMS in compound annual growth rate (CAGR) over the years.

 

Here we can see that the CAGR return of Karvy PMS over 11 years is in increasing order except in the fifth year. The CAGR return of 3 years is 10% and it decreases to 8.5% in 5 years. Again in 7 years, it increases to 9.5%, and after that in 10 years, it increased to 13% and then in 10 years, it increases to 17%.

So we can see that the Karvy PMS is performing well. And one who wants to invest his/her fund with a well-performing PMS company can choose Karvy on the basis of its performance.

Karvy PMS Investment Plan

Karvy PMS also offers four types of Investment plans like most of the PMS companies of the industry. Here is the list of four categories/range of investment amount in which one can invest according to their financial condition.

• Bronze (₹25L – ₹50L)
• Silver (₹50L- ₹1 Cr.)
• Gold (₹1Cr. – ₹5 Cr.)
• Platinum (₹5 Cr & above)

So, we can see that there are four different names of investment plans which have a different range of investment amount. You can choose anyone according to your risk-bearing capacity and availability of fund for the investment purpose.

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Karvy PMS Commission Model

Karvy PMS works under three different types of commission/fees model. Here is the list of models:

• Prepaid commission model
• Volume-based commission model
• Profit-sharing based commission model

Prepaid commission model:

The Prepaid commission model is a very simple type of commission model.

Under this model, a client is charged or pays fees to the funder manager before starting the investment process. Clients are charged on the basis of the investment amount. A fixed percentage of the investment amount is charged by the clients as a fee or commission.

This model means the performance of your portfolio (Positive or negative) will not affect the commission of the fund manager. You will be charged before that.

• If the investment range of a client is ₹25 lakhs – 50 lakhs then the fee will be charged 1.55% of the investment value.
• If the investment value is in the range of ₹50L-1cr then the fee will be 1.45% of the investment value.
• If the range is ₹1cr – ₹5cr, the fee will be 1.25% of investment value and
• more than ₹5cr fee will be charged 1.05 of the investment value.

All commission is on a yearly basis.

Volume-based commission model:

The volume-based commission model is a different type of business model. Under this model, a fund manager charges his/her commission on the basis of the volume of transactions generated by them in a year. It means transaction’s volume will be checked for the payment of fees.

A fund manager handled how many transactions for the investment portfolio of a client.

In this model also, nothing to do with the profit/loss of the portfolio, only the volume of investment transaction will be checked. The PMS commission required to be paid to the fund manager can be very high as only the volume of transactions will be checked.

Taking the range of the investment volume of a particular portfolio of the client, the percentage of the commission (a fixed percentage of volume) will be charged.

Profit-sharing based commission model:

Profit-sharing model is one of the best and all-time favourite models for investors. In this model, they are supposed to pay the commission to the firm only after realization of profit from the portfolio. No profit, no fee/commission. So, a fund manager gives his/her best in portfolio management.

Because a client pays commission only after earning a profit, the percentage of profit-sharing with the fund manager is very high, but at the same time, the risk associated with the portfolio is very low.

Let us take a quick look at the fee/commission percentage charged in above all three models.

 

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Karvy PMS Charges

In addition to the commission/fee charged by the Karvy PMS, they also charge various types of fee like upfront fee, Depository fee, brokerage etc.
Here is the list of other charges required to be paid to the company.

• Management fee- As per the type of commission model.
• Upfront fee- It is paid in the range of 0.9%-1.5% of the asset value.
• Custodian charge– In the range of 0.2%-0.3% of Asset value.
• Brokerage charge- The brokerage charge is between 0.009%-0.019% of the total transaction value.
• Exit load fee- This is in the range of 0.9%-0.15% of the withdrawal value. It means the fee will be charged in this range if the amount of the portfolio will be withdrawn by the client within 1 year of portfolio creation.
• Depository charge- 0.10%-0.15% of Asset value.

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Karvy PMS Benefits

Following are the benefits of Portfolio Management Services with Karvy:

• Karvy PMS uses fundamental analysts view to track and choose the securities to add in the portfolio.
• After going through various aspects of a stock or a particular sector, any stock or other asset is added to the portfolio.
• A client can view their portfolio at any time.
• Stocks are never chosen by the company on the basis of emotions. They pick those securities only which are fundamentally and technically strong.
• The fee structure is affordable and offers three types of fee/commission model for the convenience of clients.
• A client gets the facility of Email and SMS updates which takes place in their account.
• Offers online access of web to the clients through which one can generate portfolio information and various types of relevant reports.

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Karvy PMS Customer support

Karvy PMS provides various types of customer support to the clients which makes them happy while handling their investment portfolio with the company.

They provide Email and chatting facility to their clients so that they can get all relevant information and can also ask questions related to their portfolio.

Clients will get a relationship manager also who will help in solving their problems and answering their queries.
One can directly call the fund manager also if they want to get an answer directly from them. But, only 5-8 times in a month.

The team of Karvy PMS is responsible for solving any problem of the client within 10 working days.

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Conclusion

Karvy PMS team works hard for the higher return of your investment. They have robust research and analyst teams which always pick the most suitable asset for your portfolio.

Their fee structure and other charges are also affordable. They offer various types of schemes for clients from time to time. Customer support makes their clients happy by achieving such support from them. Karvy PMS uses different strategies for both asset class of investment.

So, Karvy PMS always remains on the top of any investor who is searching for a good and trustful PMS company.

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Karvy PMS FAQs

Here is a quick look at some the frequently asked questions of Karvy PMS:

How one can sign up for Karvy PMS?

Ans: First of all, you will have to fill up the client registration form. After that, an agreement is required to be signed up by both the parties and a power of attorney also which will be in the favour of KSBL. This will allow the company to act in favour of a client.

Who can invest in PMS?

Ans: Following are the eligible person who can invest in PMS:
A resident individual, a non-resident Indian, a partnership firm, Hindu undivided family, Trust and Corporate body.

Why one should choose PMS?

Ans: Because of the following reasons, one should choose PMS:

• Personalized investment solution.
• Customized solution to get an investment objective.
• Appointment of the wealth manager.
• An option to pick stocks for your portfolio (Non-Discretionary PMS only)

Is there any Lock-in period in PMS?

Ans: No, there is no lock-in period in portfolio management service. But, to get the best result one should wait for 15 months at least.

How tax will be levied on PMS?

Ans: There is no special tax treatment in case of PMS. The Tax treatment will be just like direct equity investing as the stocks bought under the portfolio is under the name of an individual.

In case you are looking to use Portfolio Management services, let us assist you in taking the next steps forward. Just fill in some basic details here:

 

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