Your first PMS, checked honestly.
You are thinking about moving serious capital into a portfolio management service for the first time. Before any pitch, understand what actually changes, what it costs, and whether it fits you today. This page is educational, and nobody here is in a hurry.
Three things actually change.
Versus the mutual funds you already know, a PMS changes three real things. They are trade-offs, not advantages, and anyone selling you one should be as clear about the right-hand side as the left.
You hold the shares, not units.
In a mutual fund you own units of a pool; the stocks belong to the scheme. In a PMS the shares sit in a demat account in your own name. That is real transparency, and real responsibility: every trade, every contract note, every corporate action lands with you.
The trade-off: More ownership, more paperwork in your name.
15 to 25 stocks cuts both ways.
A diversified fund typically holds 45 to 70 names. A PMS runs 15 to 25. Concentration is the entire point, it lets conviction matter, and it amplifies both directions. Strong years look stronger, weak years look weaker, and a single wrong position is visible on your statement.
The trade-off: Sharper highs, and sharper lows.
Every sale is your tax event, that year.
A mutual fund defers your tax until you redeem; churn inside the scheme never touches your return filing. In a PMS, every sale the manager makes enters your capital gains computation in the year it happens, whether or not you withdrew a rupee.
The trade-off: You pay tax as it happens, not when you leave.
Where a PMS sits between the two.
Mutual fund on one side, AIF Category III on the other. The middle column is what you are considering; read it against both neighbours, not in isolation.
| Mutual fund | PMS | AIF Cat III | |
|---|---|---|---|
| Minimum investment | ₹500 | ₹50 lakh | ₹1 crore |
| What you own | Units of a pooled scheme | Shares in your own demat | Units of a pooled trust |
| Typical holdings | 45–70 | 15–25 | Varies by strategy |
| Tax treatment | Deferred until you redeem | Every sale taxed in your hands, that year | Cat III: typically taxed at fund level |
| Visibility & reporting | Daily NAV, monthly portfolio | Every holding and trade, security level | Periodic reports, strategy dependent |
| Exit mechanics | Any business day at NAV | Days to unwind; exit loads years 1–3 common | Lock-ins and gates possible |
| Best use | Core diversified base | Concentrated conviction sleeve | Specialist strategies at scale |
Typical observations across the industry, not rules. Individual schemes vary; the disclosure document of the specific product always wins.
Six questions. Answer them honestly.
This is the whole decision, compressed. Two of the six are hard gates: fail either and a PMS is the wrong tool right now, whatever any pitch says. It is an educational self-check, not advice, and nobody sees your answers.
Not "probably". No house purchase, education fee or business need is waiting on it.
Count everything you could invest, not just what is in equities today.
Have you, not would you. Staying invested through 2020 or 2022 counts. Watching from cash does not.
Savings, FDs, liquid funds. Money you could reach within days without touching the portfolio.
A PMS statement names names. One holding down 40% is not hidden inside a NAV.
Every manager sale lands in your ITR that year. It is routine work, but it is real work.
This check runs entirely in your browser. Nothing you answer is stored or sent.
Two fee models, and the lines under them.
At a first ticket you will mostly be shown two structures. Neither is better in the abstract; what matters is that every line is written down before you sign.
A flat annual charge on assets managed, billed in good years and bad. Predictable, easy to compare, and it compounds against you in flat markets. Ask what it drops to at higher tickets.
A lower fixed fee plus a share of gains above an agreed hurdle. Aligns incentives, but only if the hurdle and high-water mark are in writing. No high-water mark, no signature.
- GST at 18% on all fees
- Brokerage and custody charges on trades
- Exit loads, typically tapering over years 1–3
A direct on-boarding option (without a distributor in the chain) also exists with most managers; ask for it and compare the schedules. The full fee deep dive is here.
Your portfolio, your tax events.
Because the shares are yours, every sale the manager makes is a taxable event in your hands, in the year it happens. There is no wrapper deferring it until you exit.
That makes portfolio turnover a functional cost of the strategy, not a footnote. A high-churn book can hand you a real tax bill in a strong year even if you never withdrew anything; a patient, low-churn one leans on the long-term rate.
Ask for the turnover number. It is the one most likely missing from the pitch deck.
The full PMS and AIF tax guide is here. Confirm your own position with a tax adviser.
- Short-term (held ≤ 12 months)
- 20%
- Long-term (held > 12 months)
- 12.5%
- LTCG exemption, per year
- ₹1.25 lakh
Indicative mainland rates for listed equity. Verify against the current Finance Act with your CA.
Know every cost. Then decide.
Fees, taxes and turnover on the table first, so the decision is arithmetic, not persuasion. That is the whole point of this page.
Book a private consultationYour first twelve months.
What actually happens after you say yes, so none of it surprises you. Five stages, and the last one is the only verdict that counts.
- 1Weeks 1–2
KYC and the agreement
PMS agreement, fee schedule, disclosure document, risk profiling. Read the fee annexure line by line; this is the moment to ask every question.
- 2Weeks 2–4
Account and limited PoA setup
A demat and bank account in your name, with a limited power of attorney so the manager can trade and settle, and nothing else. You retain ownership throughout.
- 3Months 1–3
Staged deployment
Most managers deploy in tranches rather than all on day one. Agree the pace in writing before funding, so a slow start is a plan and not a surprise.
- 4Monthly
The statements rhythm
A factsheet plus a full statement of holdings and transactions each month, usually with a live login. Skim monthly; resist judging monthly.
- 5Month 12
The first real review
One year in, review performance against the benchmark you agreed up front, after all fees. This is the first checkpoint that means anything.
Skim the factsheet monthly. Judge at month twelve.
What goes wrong for first-timers.
Six mistakes we see again and again in first PMS decisions. Each has a boring, reliable fix.
Chasing last year's topper
Judge three to five year rolling returns against the strategy's own benchmark. Last year's table is the worst shortlist there is.
Signing on vague fee language
Get the full schedule in writing before funding: fixed fee, profit share, hurdle, high-water mark, exit loads, GST. If it cannot be written down, walk.
Funding it from committed money
Only surplus, five year plus capital goes in. House, education and safety money stays out, whatever the projected return.
Judging the manager at six months
Agree up front that the first serious review happens at 12 months, against the agreed benchmark. Six months of a concentrated book is noise.
Buying the brand, not the strategy
A famous house can run a dozen different mandates. Read the specific strategy you are buying: concentration, style, churn, capacity.
Never agreeing the benchmark
Fix the benchmark in writing before the first rupee moves, so both sides know what good looks like at review time.
When mutual funds are simply the better tool.
A good distributor should be willing to tell you no. This section is us doing that in advance. If any of these describes you today, the answer is not a smaller PMS; it is not a PMS yet.
- ₹50 lakh would be a stretch for you rather than comfortable surplus
- There is a real chance you need this money inside five years
- The allocation would breach 25% of your investable wealth
- You have never actually held through a 30% drawdown
- The annual capital-gains filing burden is unacceptable to you
- Keep compounding in diversified funds; it is the right tool, not a lesser one
- Build the 12 month liquidity buffer and let the surplus grow past the ticket
- Get one full market cycle of holding behaviour on your own record
- Rerun the six questions above whenever your situation changes; they take a minute
Ask Nyra before you sign anything.
She has read the factsheet and disclosure document of every SEBI-registered PMS, scores each on one 0 to 10 basis, and cites her sources. The fastest way to compare strategies without the sales layer.
What first-timers ask us.
Yes. SEBI set the PMS floor at ₹50 lakh in January 2020 (raised from ₹25 lakh), and no manager can go below it. It can be funded as cash, as an existing portfolio of securities, or a mix, as long as the value clears ₹50 lakh at onboarding.
Not quite your situation?
PMS Sahi Hai is operated by Nyra Capital Partners Consultancy Pvt Limited, an APMI-registered distributor (Registration No. APRN08358). We are a distributor, not a SEBI-registered Investment Adviser, and we are remunerated by the portfolio managers whose products we distribute; this is disclosed to you and does not change the price you pay. Nothing on this page is investment, tax or legal advice, and no returns are assured or guaranteed. PMS and AIF investments are subject to market risk; read all scheme documents carefully. Past performance is not indicative of future returns. The suitability check above is an educational self-check that runs entirely in your browser; nothing you answer is stored or sent.