UTI PMS

UTI PMS is one of the oldest and most trusted brands in India. The company is promoted with the help of four sponsors (popular banks of India). The portfolio management services offered by the company gives an attractive return to the investors.

Let’s find out the background of this service company, the performance of these investments, charges levied, benefits and concerns etc.

UTI PMS Review

UTI PMS was established in the year 2002 and started its operation on February 1, 2003.

State bank of India, Bank of Baroda, Life insurance corporation of India and Punjab National Bank acts as the promoter of the portfolio manager. Each sponsor holds 25% of the paid-up share capital of the PMS Companies in India.

UTI AMC, the private limited company converted into a Public Limited Company on 14th November 2007.

UTI PMS is a portfolio manager which offers three different types of Portfolio management services to its clients. The services they offer are of three types i.e. Discretionary, Non-Discretionary, and Advisory services.

The clients of the company are High net-worth clients, Institutions, and Corporate.

Also, read UTI AMC IPO Allotment Status.

UTI PMS has been managing the domestic as well as offshore funds since the year 2004. Some of the offshore funds which UTI PMS is managing are:

• Shinsei India fund (Indian equity fund based in Japan).
• Rainbow Fund (a multi-class equity fund registered in Mauritius).
• China-India Dynamic Growth fund (Singapore based).
• AI Madina India Fund, (a complaint fund registered in Kuwait).

The Government of India has also appointed the company as its portfolio manager for managing the funds of National Life Insurance and the National Skill Development Fund (Mainly a debt-oriented fund).

UTI PMS offers almost five strategies which include aggressive, Moderate, and Conservative strategies.

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UTI PMS Types

Now, in this article, we are going to discuss various important aspects of UTI PMS like the types of PMS, PMS strategies, commission model, manager’s detail, performance/return, investment plan, charges, customer support, conclusion and finally FAQs.

UTI PMS offers three different types of portfolio management services. 

• Discretionary PMS
• Non-discretionary PMS
• Advisory PMS

1. Discretionary Portfolio management: 

Under this portfolio management service, the portfolio manager has full discretion to manage the investor’s portfolio. The investment is made by taking care of the risk profile of an investor indicated in the Account opening form.

The Client can check the position and performance of their portfolio from time to time. They will also be informed to the client before taking any step by the portfolio manager.

The company offers two options to the clients, namely the fixed fee and fixed plus variable fee.

2. Non-Discretionary Portfolio management:

Under this portfolio management service, the client directs the step that should be taken by the portfolio manager. The portfolio manager passively acts while handling the investment portfolio and the active role is played by the client only.
In this service, the portfolio manager executes trades on behalf of the client, do settlements, custody and other back-office functions.
The fee under this service is the combination of a fixed fee and/or return on the portfolio.

3. Advisory Portfolio Management:

Based on the risk-bearing capacity of the client, the portfolio manager offers advice to them from time to time. However, the final decision remains in the hands of the client related to the portfolio investment.

The fee is charged on a fixed basis or a variable basis as mentioned in the term and conditions of the account opening form.

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UTI PMS Fund Managers

The performance of a portfolio management company depends on the team of the portfolio manager, analysts and fund managers. Their expertise and experience can offer a superior return to investors.

UTI PMS has also a team of experts, here we are going to discuss the main fund manager of the company.

Ajay Tyagi (Fund Manager):

Ajay Tyagi is the fund manager and the executive vice president at UTI in the fund management team. He manages approximately. He manages both the onshore and offshore funds of clients with more than $2billion AMU.

He Joined the portfolio manager in the year 2000 as an equity analyst and was tracking the sectors like Telecom, IT, and media sectors.

Ajay Tyagi holds a CFA degree and also completed an MBA from Delhi University.

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UTI PMS Strategy Details

The portfolio manager offers investors different types of strategies according to their financial needs and risk profile. These strategies help the investors to get a superior return as per their expectations.

The company works on long-term strategy, mid-term and short term investment strategies. Money is invested only after knowing the need of clients.

Here is the list of investment strategies:

• Aggressive investment strategy
• Moderate investment strategy
• Conservative investment strategy

Aggressive investment strategy:

Aggressive investment strategy refers to the type of investment in which a higher degree of return is expected by taking relatively a bit higher degree of risk.

The objective of the strategy is a capital appreciation rather than the safety of principal or income.

The strategy fits those investors who are financially strong enough to invest a higher amount in the market and has a high risk-bearing capacity. It is suitable for young investors

For an aggressive strategy, the management should be more aggressive in comparison with the Conservative and moderate strategy.

The benchmark index to measure the performance of the Aggressive investment strategy is the BSE Mid-Cap Index.

Moderate Investment Strategy:

The strategy aims to protect the Asset of the investors against the fluctuations/inflations of the market. Here the higher return is not the primary objective but, the main objective of the strategy is capital protection.

The investment under moderate investment strategy is for the mid-term, in the range of 4-6 years.
The portfolio mix of this strategy generally consists of 10% money market, 50% equities, and  40% bonds,

The kind of investors who prefers this strategy is those who are in the middle of investment capacity and the risk-bearing capacity. They can moderately take a risk and invest money to get a good return out of their investment.

Conservative strategy:

The objective of the conservative strategy is capital preservation over investment return. Through the strategy, the portfolio’s value is protected by investing in safe and low-risk securities such as money market and fixed deposit, blue-chip/Large-cap companies.

Those who opt for conservative strategies have low to moderate risk tolerance.

The investment portfolio under the Conservative strategy mainly holds debts instead of equities.

The best example of this strategy is a retired person. They do not remain in the position of risk-taking instead they want safety for their principal amount.

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UTI PMS Performance

The performance of all three strategies is discussed below in the table against the benchmark of each. The performance table has shown the portfolio performance of those clients only who have availed of the PMS services for that particular period.

The return of the PMS strategies of the last three years:

 

From the above performance table of UTI PMS strategies, we can see that the first two strategies ‘aggressive’ and ‘moderate’ has given a superior return to the investors over the last three years. These strategies have beaten their benchmark index with a good percentage of return.

However, the third strategy ‘conservative’ has not performed well in these years. The percentage of return is lesser than the benchmark index in all three years.

Hence, on the basis of the performance table, one can invest their money with this portfolio manager.

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UTI PMS Investment plans

The investment plan offered by the company attracts all categories of investors to the company. An investor can have a low financial capacity, moderate as well as high also. So, the company has created an investment plan which suits each category of investor.

The following are the investment plan offered by UTI PMS:

• Bronze (₹25,00,000 to ₹50,00,000)
• Silver (₹50,00,000 to ₹1 CR)
• Gold (₹1 CR to ₹5 CR)
• Platinum (₹5CR & above)

1. Bronze: 

The plan is the basic investment plan and the investment amount is as per SEBI guidance. If you are the one who has a low-risk profile and financial capacity is also low, you can choose this plan. You should refer to PMS SBI for knowing more about rules and regulations.

2. Silver:

Silver, the second investment plan created by the company for those investors who can afford investment between Rs.50L to Rs.1 CR. Under this plan, the risk profile of the investor is moderate.

3. Gold:

Another investment plan offered by the company is ‘Gold’. The plan best suits those investors who have a moderately high risk-bearing capacity and are ready to invest in the range of Rs.1 CR to 5 CR.

4. Platinum:

The plan is best for high net-worth clients. Those who can invest above 5 CR can bear a high risk to get a high return from the portfolio investment.

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UTI PMS Commission models

The company offers three basic commission models to investors. They can select any model as per their convenience and risk profile. Each model is based on different factors like profit, the volume of transactions, the total value of the portfolio etc.

Here is the name of the commission model:

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

1. Profit-based commission model:

This is the most demanded and favourable commission model. Most investors want to pay commission through this commission model.

Under this model, the PMS commission is paid based on the total profit earned out of the investment portfolio. The portfolio manager gives their best to earn a profit, as they know the commission depends on the profit. If there is no profit, there will be no commission to the portfolio manager.

So, this model gives surety of the best return from the investment portfolio as high as possible.

A percentage is fixed at the time of agreement between both parties. The higher the range of profit earned, the lower will be the percentage of commission.

2. Prepaid commission model:

The commission under this model is paid in advance before getting a portfolio management service. The benefit of this model is that you are not supposed to pay a higher commission with a higher profit or a higher transaction volume.

Again, the percentage of commission is fixed at the time of the agreement.

In this model, there are chances that the portfolio manager might not be attentive all the time like in the profit-based commission model.

3. Volume-based commission model:

This model is based on the total transaction volume related to a particular investment portfolio.

The commission is paid on the basis of the total transaction volume completed within a year by the portfolio manager. The volume of transactions decides the commission of the portfolio manager.

The higher the total volume, the higher will be the commission and the lower is total transaction volume, the commission will also be lower.

So, in this model, there are chances that the portfolio manager increases the transaction volume just by completing unwanted or unprofitable transactions.

In the below-mentioned table, we are going to discuss the percentage and range of total volume, portfolio value, and the total profit:

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UTI PMS Charges

Apart from commission, an investor is required to pay some other charges also like the management fee, brokerage charge, custodian charge, entry-exit charge, etc. that are called PMS Charges.

For Discretionary PMS:

A fixed management fee shall be charged up to 5% of NAV of the client’s investment portfolio.

The second method of the management fee is (Fixed+Variable). In this method, the fee is charged, 5% of NAV plus the variable fee which is linked to the positive Annual Portfolio Return.

UTI PMS also charges withdrawal fees from the clients. The fee is charged according to the schedule of fees attached with the portfolio management agreement.

The company also charges a brokerage fee, custodian charge, etc as per the agreement between both parties.

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UTI PMS Benefits

UTI PMS offers a lot of benefits to the investors so that they do not need to move anywhere in the lack of any service.

Here is the list of benefits you will get as a PMS investor.

1. Multiple strategies: UTI PMS offers multiple investment strategies to clients. These strategies are created with the view to offer a convenient strategy to the investor according to their financial condition and risk profile.

2. Convenient commission model: The company offers three different bases of commission by which a client can pay commission to their portfolio manager.

The technique of commission fee is created to help the client in making payment as per their comfort.

3. Superior return: Two out of three investment strategies give a superior return to the investors over the years. The strategies are created in such a way that works according to the client’s financial objective.

4. Customer support: Very good customer support is provided by the company. The investors are allowed to solve their queries by the means they want.

A relationship manager is also appointed by the company to make the relationship between both parties strong.

5. Experienced professionals: The team of well-experienced professionals handle the portfolio of investors and so the chances of a superior return increase.

The team gives attention to the market and the portfolio round the clock so that they can take the necessary step instantly. 

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UTI PMS Customer Support

If a company offers good customer support to its clients, the chances of a long term relationship with the client increase.

UTI PMS is also very supportive of clients. They offer various types of support to the clients so that they do not face any problems while getting PMS service.

The company offers Email and call facilities to the investors so that they can call directly to the company to solve their queries. For this, the company has appointed a relationship manager.

Another support is the direct calling facility to the portfolio manager. A client can directly ask any question to the portfolio manager related to their investment portfolio. The number of calls in a month is fixed depending on the worth of the portfolio.

The problem-solving TAT of UTI PMS is 8-10 working days.

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Conclusion

UTI PMS is a brand name in the field of portfolio management services. The company is very old and has gained the trust of clients by offering an excellent service.

The investment strategies created by the company cover all categories of investors’ objectives and at the same time, an investor can choose the investment plan according to their financial capacity.

The commission model and other charges of the company is also favourable and lower to at par with the industry.

The customer support system helps the client at each step they feel inconvenient and uncomfortable.

Hence, by considering all the above, you can plan your portfolio investment with UTI PMS without hesitation.

In case you are looking to start using portfolio management services for your investment capital, let us assist you in taking the next steps ahead:

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UTI PMS FAQs

Here are some of the most frequently asked questions about UTI PMS you must be aware of:

Why one should choose UTI PMS?

UTI PMS offers a quality service to their clients such as fund management expertise,  Daily portfolio access, Efficient operation, cost-effectiveness, and finally the important is they provide you peace of mind.

Is there any guarantee of portfolio return by the company?

The answer is very clear ‘NO’. UTI PMS does not guarantee a return. There is no surety that you will get any return or in many cases capital protection also from the UTI.

Is there any minimum investment limit in portfolio management services?

Yes, Rs 25 Lakhs is the minimum amount required to invest in portfolio management services.

Can an investor withdraw the partial amount from their account?

Yes, an investor is allowed to withdraw the partial amount. However, an investor is required to maintain a minimum balance of ₹25 Lakhs.

 

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