Everybody has personal life goals that they can achieve in their life as soon as possible. Many of us want to fulfil that goal through investment. There are multiple investment opportunities in the market. But which is the most suitable and what time it would achieve matters. Every investor has a unique risk appetite; hence it’s very important to choose the correct investing path. Thus investors can seek the top AIF & PMS experts for the best suitable investing advice.
First of all, we should properly understand AIF and PMS. In today’s world, AIF and PMS are one of the best investment decisions for enthusiastic investors. We’ll try to explain each product, and you’ll also understand the difference between PMS and AIF.
What are the benefits of saving and investing?
Saving and investing shift consumption from the present to a later date. As a result, when we consider the reasons for households to invest, we consider why households are deferring consumption rather than consuming now.
One significant cause for saving is the ‘precautionary motive,’ also known as ‘saving for a rainy day.’ It entails accumulating funds to cover surprising events and bills. Unfortunately, if you have no savings and an unexpected financial event occurs (such as a car being damaged or someone becoming unable to work and losing their income), you have few options.
Why should we invest?
Having money set aside for investments is essential to prepare for life’s unexpected events. Savings serve as a buffer to protect a family from these other possibilities.
- One of the most important reasons for saving is for retirement, but money invested can also be done for a variety of other reasons, such as saving for a child’s university education, sending money abroad to family, or paying for a parent’s nursing home care. A second reason to invest is to achieve a specific goal. You can set aside a set amount each month (or week) based on calculating how much you require for a specific goal.
- You can also invest money momentarily, typically in savings accounts, for events that occur shortly, such as a vacation or Christmas, or for purchasing a car. Experts always suggest long-term investment as it provides the best return on investment.
- A third key reason for investing could be accumulating wealth for an unspecified purpose. You can use savings for various purposes, such as purchasing a second home, taking a series of vacations after retirement, or leaving an inherited wealth to children.
These key reasons all highlight a very important overall goal of investing: providing a sense of autonomy and freedom in doing things. Having enough money in your investments could allow you to quit your job and take a few months off. It may also facilitate you to do or purchase things you desire. You may be able to benefit from opportunities such as paying for education or starting a business.
What exactly is PMS?
Portfolio Management Services provide a tailored investment portfolio in the equity or debt asset classes. Professional fund managers provide these services. The goal is to achieve superior returns.
PMS provides professional portfolio management to help you build wealth. The services are frequently tailored to investors’ financial objectives. PMS is similar to mutual funds in that both are professionally managed. However, unlike mutual funds, where investors own units representing the stock, in PMS, the investor owns the underlying asset. The investor executes a power of attorney in favour of the fund manager of the top AIF & PMS experts to operate the person’s Demat account.
What are the different types of PMS?
- Discretionary PMS: A discretionary PMS is one in which the fund manager has the authority to make decisions on the investor’s behalf.
- Non-Discretionary PMS: When the fund manager only makes suggestions to the investor, the investor makes the final decision.
How does PMS help?
PMS helps in various ways. These are described briefly below.
- Portfolio monitoring: It is the active tracking of portfolio developments to maximise returns on investment.
- Customized Portfolio: Designed to meet specific investment objectives.
- Professional Management: Expert portfolio managers construct an investment portfolio to meet your goals.
- Convenience: There is no administrative burden in trying to manage your portfolio. You can evaluate the transaction synopsis regularly and receive performance updates.
Consider the following:
While the advantages of PMS are numerous, an investor should consider the following factors before investing in PMS.
- Minimum Initial Investment: It is currently valued at Rs. 50 lakh.
- Fees: In most cases, PMS includes entry fees, management fees, and performance fees, which can be fixed or variable.
What exactly is AIF?
Alternative Investment Funds are a type of investment vehicle that pools funds to continue to invest in private equity, real estate, or hedge funds. AIFs can be formed or incorporated as a corporation, trust, or legal entity (including limited liability partnerships).
What are the categories of AIF?
AIF are classified into the following categories.
- Category I: AIF invests in start-ups or social venture funds, infrastructure funds, SME funds, and others. The authorities or regulators frequently regard them as socially or economically desirable.
- Category II: Investments that do not leverage or borrow except to meet operational requirements that do not fall under Categories I or III. Private equity funds are typically included in this category.
- Category III: Funds in Category III engage in diverse or complex trading strategies, including investments in listed or unlisted derivatives. Hedge funds are typically included in this category. Closed-ended funds are classified as Category I and II AIFs, while open-ended funds are classified as Category III AIFs.
How does AIF help?
- Customisable: The structure of an AIF can be tailored to a specific investment strategy, such as exposure to a certain sector or investment across multiple asset classes.
- Flexible resources: AIF can raise funds from any investor, whether Indian, foreign, or Non-Resident Indian (NRI).
- Having a Large Corpus: Because AIFs operate similarly to mutual funds, a larger corpus is created by pooling capital. The accumulated corpus is useful in meeting investment goals.
AIF & PMS Experts India is the leading financial adviser platform where enthusiastic investors find the best advice for their investing journey. We’ve years of domain experience that can help people with great returns. You can contact us as we are India’s best AIF & PMS experts. People can reach us through email at [email protected] or call at 8368586435 or 1800 210 1995. You may also visit our page https://aifpms.com/contact/