PMS Funds - India

Any location from where we can see annual return of PMS Funds. Sebi link posted here somewhere gives only monthly performance. but if rolling annual return is provided, it becomes easy to comprehend.

What is the minimum investment with Kotak PMS?


Basic query :How the PMS works- we have to buy on our own in our demat or have to hand over the money or some other way…??

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I want to ask fellow boarders who opt for a PMS and also dealing with equities independently through demat account. How they file income tax statement? Do the PMS manager give them taxation detail and they collate it with return of their independent portfolio and then submit? Do we have to create separate PINS/ Non PINS account or same account can be used for PMS. I am an NRI and will appreciate much if I get information specific to my situation. Thanks.

Moneylife posted a very poor review of kotak pms back in 2010

Minimum in Rupees is the SEBI-mandated figure of 25 lakhs. One can also invest in USD for which the minimum is USD 100,000.

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@Irshad In my experience they will start a new demat account and bank account in your name , and you will give them full rights to operate your demat and bank account. This bank account wont have any other transactions other than your dividends .
Regarding Tax, they have ledger which will show you short term gains/long term gains etc that you have acquired and by year end you will be given a audited statement of your account from a CA which you can show in your income tax filings .
PMS statement is usually like a bank statement you can pretty much understand everything thats happening in your account


Thanks for this information, Vivek.

they see everything with pessimistic view

I went through some trouble in trying to find out the returns of some of the well known PMS schemes. The first column for each scheme is the SEBI reported return for the prior month. The second column is the value of 1000 Rs. invested in the scheme on Jan 01, 2016.

The link to the google sheet is here:

I will leave you to your own conclusions. In any case, these things should be viewed with a longer period than this, But will keep updating. The ValueQuest Investment Advisors mentioned here is not Prof. Sanjay Bakshi’s fund management. It is some other group.

Three caveats: I just took a random sampling of PMS Schemes, including schemes of well known “gurus” too. Second, for centrum, there was no data for April 2017, so I took the return to be the average return of the other six schemes. Third, for Basant Maheshwari, there was no data for Jan 2016, and in Feb 2016, the scheme had practically no AUM. So for these two months too, I have taken the average of the other six schemes. This could change the returns for the short period here quite dramatically, but should not have much impact over the long haul.

Someday, I will get around to writing code to automatically pull up data from the sebi site and create some metrics around this information. But till then, this stupid effort probably has to do.


All returns are mediocre to say the least, except maybe Aditya Birla Group.

After this performance, we have to pay fixed fee i.e. say 2%, and then performance fee, 20% on top of hurdle rate, say hurdle rate is 10%, PMS performance 30%; then we have to pay 20% of 20% = 4% plus fixed fee, say 2%.

What I conclude is that if PMS has performed 30%, then I will get 30-2-4=24%.

Am I correct? Please guide. Plus all DP Charges and short term tax rate and exit rate etc.

Fixed fee is charged on average value and not on initial corpus. So if 100 goes to 160 and comes down to 130. then fixed fee will be (100+160+130)/3 = 130*2% = 2.6.

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I could not find out whether the SEBI reported returns are pre fees or post fees.

However, in terms of performance fees, most follow a 2 and 20 structure, wherein you pay 2% + 20% over a hurdle rate. However, most also offer a flat 2.5-3% plan wherein you don’t pay any performance fees, but a flat fee.

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can you share the sebi link for PMS data as i could not find the same in new sebi website

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IMHO, this is a very incorrect way of computing annual returns. Investors see AUM weighted return which is the global norm…

It is not possible to compute AUM weighted average returns by taking figures from the SEBI website and running it on excel as there are regular monthly inflows.

This ET Markets article on BM says that the PMS has delivered 48.2% annualised return since inception which is AUM weighted.

I called up Basant Maheshwari’s office and the lady who picked my phone said that their average weighted annualized returns since inception to date is 48% post fees and this is certified by their custodian Kotak – a reputed name.

The article also says that BM had made some mistakes last year by buying a few small caps but his HFC stocks like Canfin and PNB have been rocking and have been large gainers…

Disc: Not invested with this scheme.

Several PMS funds have given a post fee return CAGR >40% for past 4-5 years which easily beats the returns of best of the mutual funds.

Good fund managers typically are very shy and avoid limelight. Unlike people like Rakesh Jhunjhunwala who would prefer limelight because once he has taken a position, he would want others to follow; PMS funds keep on adding clients and it becomes difficult to generate good returns for their new clients if portfolio stocks start running too soon.

SEBI has been clamping down on PMS funds in the last few years with increasing compliances. SEBI has increased the minimum corpus from 10L to 25L. Managers believe that it may soon reach 1Cr and thus many have already introduced 1Cr as the minimum.

There are several good PMS funds out there. Some advice for prospective investors:

  • Avoid PMS funds run by banks, NBFCs or brokers. Go for entities which only do PMS.
  • Evaluate returns CAGR along with duration and consistency
  • Timing is crucial. Not every fund manager has a patience to build a portfolio over 3-4 months for a new investor.
  • Instead of going through a wealth manager, approach the PMS funds directly and negotiate on fees. 1%/10% is not unheard off.

I have heard good things about Basant Maheshwari, Nine Rivers, Quest, Vallum Capital (Alphabetical order; All have 45%+ returns for last 4-5 years post fees). Obviously, there are good PMS funds other than these but people in my network had not invested through them.

PS: I met a few PMS fund managers/owners as I intend to start a PMS fund myself (And thus my views may be biased)


Most of the value created by a good PMS manager accrues to the PMS manager and not the investor.

In a good year if a PMS earns 30% returns excluding fees, investor would earn 23-24% as calculated by @Yatharth and @chetanb above. PMS usually churns investor portfolio so investor will be paying approximately 1-2% of the portfolio as STCG Tax. So after all fees and taxes the investor earns about 21-22% (net of fees) when PMS earns 30%.

Now, in a good year when PMS manager earns 30%, even an average mutual fund earns 20-22% so PMS offers no advantage over MF on a net-returns-to-investor basis but adds the hassle of filing taxes.

Even if you go for a fixed fee of 3%, your portfolio will shrink by 3% each year and that can add up during down years. My analysis shows that in down years PMS returns are horrible compounding the problem. Still, a 3% fixed fee is at least better than a 2/20 structure as even MF charge you 2.5%. No wonder not many PMS offer fixed fee and have some component of performance fee.

Many PMSs run schemes or model portfolios so its really not a personalized service as envisaged by SEBI. Investors feel that they are getting something that is personalized for them and not some off-the-shelf product like MF so they feel they are above the crowd.

PMS_Data.xls (127 KB)

I use a utility spreadsheet that pulls data from SEBI site to see how some of the celebrated PMS vendors are doing. Except a few, most are not doing any better than mutual funds. My calculations are based on the reports filled by PMS with SEBi and we can debate if that is the correct way of calculating the returns but based on available information, this is the only way to calculate returns.

Essentially PMS manager use investor money as leverage without the downside risk that come with leverage.


Well said. Also, i haven’t seen any PMS talk about their performance during a bear period. Nor do they talk about their failed ideas.
I dont know much about these weighted avg returns etc. But I had looked at the monthly return for aug 2015, jan/feb 2016, nov/dec 2016. Most of them (including the famous ones) fared very badly.
I look at this way. On an average one pays (or rather PMS automatically deducts ) 3% per year regardless of the performance. This is not a small amount especially when the portfolio is large.
Also there is no fun allowing someone else to manage your portfolio.