With investors looking at options beyond the traditional investment routes for higher risk-adjusted returns, assets under management of the portfolio management industry rose nearly 17 percent in the last one year to ₹25.4 lakh crore at July end, a report by Business Standard stated.
Going ahead, the trend looks positive for the ongoing fiscal year with Portfolio Management Services (PMSs) getting acceptability by a wider customer segment, including retail, industry experts told BS.
According to the report, Assets Under Management (AUM) of the portfolio management industry rose to ₹25.4 lakh crore at the end of July 2022 from ₹21.77 lakh crore at the end of July last year, translating into a growth of 17 percent. The asset base was ₹24.8 lakh crore at the end of June this year, it added.
Of the total AUM, ₹18.6 lakh crore are contributed by funds from EPFO or PFs.
As of July 2022, the report informed that there were 1.45 lakh clients in the portfolio management industry, of which 1.36 lakh clients were in the discretionary services category, 6,933 clients in the non-discretionary services category and 1,934 clients availed advisory services of portfolio managers.
The increase in AUM of the PMS industry is in line with the recovery in broad markets and heightened interest from HNIs (High Networth Individuals) and family offices in PMS structures, Abhay Agarwal, Founder, and Fund Manager of Sebi-registered portfolio management service provider Piper Serica, told BS.
Unlike an Alternative Investment Fund (AIF) and mutual fund, the PMS as a product is highly customisable for the requirement of the investor. Also, it is possible to come up with various fee options that vary from fully fixed fees to fully variable fees, he added.
Moreover, Sebi has made PMS investments very transparent through its compliance and reporting requirements, which has also increased the confidence of investors.
"PMS has emerged as a product of choice for investors who are looking beyond mutual funds to generate long-term alpha returns," he said.
