A Portfolio Management Service with a 0% fixed fee!
Dezerv, a Mumbai headquartered PMS, has made investing affordable by waving off their fixed management fee
PremiumNew Delhi (India), June 5: Portfolio Management Services are investment solutions provided by SEBI-registered portfolio managers. Because of the Rs. 50 Lakh minimum investment requirement, they are usually reserved for the HNIs (High Net worth Individuals).
Around 400 Portfolio Management Services manage about Rs. 26 Lakh Crore in India. Mutual funds, India's most popular and accessible investment option, manage about Rs. 40 Lakh Crore. This shows just how big the PMS industry is despite being available to limited investors.
PMS Services have been in the news recently because most have underperformed their respective benchmarks. While many reasons can explain the underperformance of PMS Services, the most critical reason is the hefty fee they charge.
With this in mind, Dezerv, a Mumbai headquartered PMS, has made investing affordable by waving off their fixed management fee. Most other PMS Services charge a fixed management fee of 1-2% that gnaws away the net returns investors earn.
But a fixed management fee is not the only type of fee that Portfolio Management Services charge. We discuss all fees and costs involved in PMS investing below.
Understanding PMS fees
Portfolio management services charge 3 types of fees:
1. Management fee
2. Performance fee
3. Miscellaneous
As you can see, these fees can quickly add up and start eroding your net returns and investment value significantly.
Dezerv PMS charges a 0% fixed management fee
Dezerv, a wealth tech startup, has disrupted the Portfolio Management Service industry with a 0% fixed management fee.
Dezerv believes that investing should be affordable. Further, we saw how fees, especially the fixed management fee, end up reducing investor returns. By waiving off management fees, Dezerv’s investors are able to generate higher returns.
Dezerv has simply aligned its interests with those of its investors by charging only a 5% performance fee. The industry standard for performance fees is 10%-20%.
A 5% performance fee means if you get 10% returns on your portfolio, you will pay 5% of 10%, i.e., 0.5% of invested amount to Dezerv.
Features of Dezerv Portfolio Management Service
While super low fees are a compelling enough reason to consider Dezerv PMS, here are a few more reasons why you can trust them with your money.
Founded by an experienced team
Dezerv was founded in April 2021 by veterans who previously held senior positions and built new business verticals at companies like IIFL Wealth, Anand Rathi Wealth and Kotak Wealth.
Moreover, Dezerv has an investment team with a high pedigree and a great track record.
Direct mutual funds, not stocks
Portfolio Management Services are known for professional stock investing, but few know that PMS can construct client portfolios using mutual funds, bonds etc.
There are two advantages of using direct mutual funds instead stocks in PMS:
1. Mutual funds have historically outperformed stock-based PMS. Hence, a well-managed mutual fund-based PMS is very likely to outperform stock-based PMS too.
2. When a mutual fund manager churns (buys and sells stocks) the portfolio, the taxation and transaction cost burden doesn’t fall on the investors. Hence, investors can save up to 1.5% in costs by investing in mutual fund-based PMS.
Dezerv PMS uses a mix of passive equity funds, active equity funds and debt mutual funds to construct investment portfolios. The investment team at Dezerv actively manages the portfolio, changing funds and asset allocation to navigate market conditions as and when required.
Skin in the game
As we saw, Dezerv's interests are aligned with their investors because of the 0% management fee and lower-than-industry performance fee.
However, Dezerv goes one step further. Core members of the Dezerv Team heavily invest in their own PMS and have skin in the game.
Personalized asset allocation
Asset allocation refers to how much money you should invest in equity and debt.
Dezerv identifies your risk profile and plans your financial goals. This helps them recommend the best asset allocation for your situation.
Achieve financial goals and create wealth
Because Dezerv lets you personalize your investment portfolio through custom asset allocation, you can invest for specific financial goals or just wealth creation. On the other hand, most of the other PMS Services help clients create wealth only and do not allow customized asset allocation.
24x7 access to a relationship manager
At Dezerv, you get unlimited access to an investment expert who will not only help you create a personalized portfolio but also answer your questions and help you stay invested even when the market is volatile.
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