Portfolio Management Services
1. What is Portfolio Management Service (PMS)?
Portfolio management service is a customized investment service professionally managed by professionals working in the capital market sector of Nepal on behalf of the client that helps investors to make diversification of their investment in various sectors based on their investment objective and risk-return appetite.
2. What and how many types of PMS are currently being operated?
There are two types of PMS; Discretionary and Non-Discretionary. A discretionary portfolio management is where a portfolio manager makes investment decisions in their own discretion but being aligned with the investment guidelines provided by the clients initially.
A non discretionary portfolio management is where the PM manages the funds in accordance with the directions of the clients. The PM consults and suggest the investment ideas to the clients based on their initial investment guidelines and risk return appetite, but the execution of investment timing solely rests with the client.
3. What are the benefits of PMS?
· Professional Management · Hassle free operations
· Backing & experience of Mutual Funds in Nepal ·Constant Portfolio Trackin
· Risk control · Convenience
· Transparency of operations · Dedicated RM
· Personalized advice · Maximum returns, minimum risk
· Greater control
4. Who is the regulatory body?
Securities Board of Nepal (SEBON) is the apex regulator for the securities market in Nepal.
5. Is PMS available for NRNs?
NRN’s can invest in the secondary market of Nepal as per the Portfolio Management Guidelines, 2067 (2010 A.D.)
6. What are the documents required for initiating PMS?
We require a copy of citizenship and a photograph of the client. Additionally, the client will require filling additional forms for bank account opening, SCL account opening to complete the account opening procedures.
7. What is the minimum investment amount?
As per the guidelines set by SEBON, NPR 300,000 is the minimum amount to start a PMS. However, we at Siddhartha Capital have maintained a minimum threshold of NPR. 5,00,000.
8. What is the role of a Portfolio Manager?
The primary role of a Portfolio Manager is the management of clients’ portfolio along with other roles as mentioned in the guidelines of SEBON.
9. Will the assets be purchased in my name or a pool of fund just like a Mutual Fund is created?
The entire assets will be purchased in clients’ name.
10. How will I know about my portfolio status?
We provide the client a username and password through which the client can view their portfolio by logging into through Siddhartha Capital’s website. Also, we provide a portfolio investment report on a monthly basis; and the client can call their RM for any queries on their portfolio.
11. How long will the contract period be?
The contract period between the client and Siddhartha Capital is for a period of 2 years. However, the client can anytime withdraw his/her holdings. However, if the client wishes to withdraw the entire portfolio within 1 year of signing of agreement, an exit load of 1% at the portfolio value as on that date will be levied. After 1 year of signing of agreement there is no exit load.
12. Can I withdraw my profit before the contract period?
Yes the profit can be withdrawn at intervals depending upon the growth rate and at the consent of the Portfolio Manager.
13. What happens after the maturity period?
The Portfolio Management Agreement (PMA) can be renewed after the maturity period of 2 years or the client can take back their assets after the closure of portfolio and payment of performance fees, if there are any.