Portfolio Management

Why PMS?

Your options to invest in equities are as follows :

invest directly : If you have the skill and time, then why not !

through mutual funds : Good for most small investors, offering them investment through diversification, albeit with lower returns.

PMS : A specialized and customized service for Investors with an investible capital of Rs. 50 lacs and above

Why

Us?

Track record of over 18 years

Portfolio Turnover Ratio of less than 1

Only a flat 10% performance linked fee

Order execution directly in client's account

Nearly all gains realized are long term

Consistently outperformed the benchmark index

Our Guiding Principles

Paitence

Businesses are not built in days, weeks or months. They take years of hard work and the same applies to investing in those businesses.

Conviction

One of the biggest drivers for success is belief and we do not let the market noise distract our focus.

Discipline

Nothing is as important as discipline while investing in equities. It is a risky asset and greed can and more often than not get the better of you.

What People Say

Dr. Mahendra Manocha

I was one of the early investors in KB Capital's PMS. That was by far the smartest decision I ever made. They have demonstrated that time and patience can generate phenomenal returns.

Barsha Khattry

Wealth creation is a risky business. Like many, I was a non-believer in the stock market as popular opinion was in favour of pain rather than gain. However, I laud the exceptional job that KB Capital has done for us. There have been years when the portfolio has not performed, but in the past fifteen years during which we have reposed our faith in KB's PMS division, the performance has far surpassed even our wildest expectations. Combined with the team's exceptional accessibility and efficiency, I'm sure makes their PMS one of the best performing that I am aware of.

Deepak Soman

I have been a customer of KB Capital for over a decade. Their investment team is experienced, focussed and inspires confidence. Their approach to investing is research-oriented and methodical, with returns consistently out-performing market indices. Support services are quick and friendly. I would recommend KB Capital to anyone looking to invest in the Equity markets.

Navin Nayar

My association of over 15 years with KB Capital started off as a casual discussion with Prashant and Mr. Poddar over a cup of tea about capital markets in general and India’s changing and dynamic position in the world order. I realised that most of the views I held were seconded by them and that there was a certain sense of conviction and sincerity in their approach to what arguably promised to be “exciting times”. I knew then that my investment was in very good hands and I initiated my PMS investment.

The years that have followed in capital markets have been both tumultuous and incredibly rewarding for investors and my original conviction in the investment approach of the fund managers has only been buttressed over and over again. I would be biased if I said that there were no moments of doubt and in this journey but these were largely on account of extraneous factors. In fact, it is during such crises that the true grit and clarity of thought of the fund managers came to the fore and while no one is immune to such factors, with their disciplined and if I may say so, conservative approach, they ensured that the damage was far less than what other investors experienced.

The other aspect of an association with KB Capital is professional service with a personal touch. Someone is always there to discuss the portfolio, give balances (Rakesh, in point) and generally to chat about the market and it’s prospects! With all this in place, it’s little wonder that they have built up a formidable client base and grown from strength to strength.

PMS FAQs

Answers to some of the questions you may have

Initial Corpus

The initial corpus can be brought into the Portfolio Management Service by way or either cash and/or securities/shares. The securities & shares shall be valued as per the market price prevailing on the date of introduction. In case if shares/securities are offered as initial corpus, the portfolio will be gradually aligned with our model portfolio over several months. For portfolios which have been started purely with cash, it would take anywhere between 3-6 months for it to get full invested. The un-invested cash would remain deployed in an exchange traded liquid fund till the same is required for meeting investment obligations. If you desire to have the investment process to be handled in any other manner, the same should be explicitly instructed by you.
Initial size of the portfolio

As per SEBI’s regulation the initial size of the portfolio has to be a minimum of Rs. 50 lacs.
Investment & withdrawal option

You have the facility to make contributions/withdrawals subsequent to initial corpus at your discretion. The withdrawal should not bring the market valuation of the portfolio below Rs. 25 lacs. However a complete liquidation of the portfolio is possible at any point of time. Withdrawals / closure can also be made in the form of securities and doesn’t necessarily need to be made in cash. Similarly additions can also be made by bringing in additional securities and not just cash.
Account Operation

All requests for addition / withdrawals / closure or any other request would have to be signed by all account holders in case the account is opened in a joint name. In case the account is in an individual name the instructions would be accepted only from the account holder. Similarly for corporate accounts, the instructions would be accepted only if the same are authorised by signatures registered with us. All instructions against the account operation would only be accepted in writing and will not be acted upon on verbal instructions.
Lock in Period

The Portfolio Management service has no lock-in period and you can make withdrawals by simply putting a request for the desired amount.
Portfolio Management Fee

The portfolio management fee shall be charged @10% of the appreciation in the value of the portfolio under management. In addition to this charge, taxes as applicable shall be levied. At present Goods & Service tax @ 18% shall be levied on the said fee. This fee would be charged at the end of every financial year or on closure of the portfolio account, whichever is earlier. There are no other fixed charges towards asset management fee apart from this flat 10% performance based fee. The fee shall be collected by debiting the portfolio account at the end of the year. TDS obligation if any, would have to be taken care of by the client himself. Necessary credit would be given to the account on submission of the TDS certificate.
Calculation of Return for charging fees

The returns shall be calculated as per the following formula: Market value of the portfolio (cash & Securities) (at the end of the financial year/termination date) X Add: Dividend accrued on the portfolio during the year Y Less: Initial corpus of funds/Securities* (A) Less: Subsequent introduction of fund/Securities* (B) Return on the Portfolio Z=X+Y-A-B * The securities shall be valued at the prevailing market rate on the date of introduction / addition to the Portfolio
Fees in case of losses

In case if in any year the above return results in a negative figure you shall not be charged any Portfolio Management fee and nor shall we contribute in the loss.
Calculation of Portfolio Management Fee if the portfolio closes at a loss at the year-end

Portfolio Management fees shall be charged only when the value of the portfolio goes beyond the previous profitable portfolio when performance fees were charged and so on and so forth. E.g., in case if the portfolio closes at a loss at the yearend the portfolio management fees will be calculated on the following basis: Year End NAV at beginning of the year NAV at the end of the year Gain Portfolio Management Fees 1 5,000,000 5,800,000 800,000 80,000 2 5,800,000 5,500,000 (300,000) Nil 3 5,500,000 5,900,000 400,000 10,000* * 10% of [Rs.5,900,000- Rs.5,800,000] Rs. 5,800,000 is the previous portfolio value where Portfolio Management fees had been charged
Brokerage

In order to comply with the SEBI directive of outsourcing 80% of the services offered through related entities, we have revised the brokerage rate to 0 and only recover the Exchange Transaction Charges and Securities Transaction Tax as per the prevailing rates.
Contract Note

All transactions will be executed in your trading code on the Exchange and hence contract notes shall be issued in your name directly. The corresponding STT collected against the transactions will also be reflected directly against your Income Tax PAN.
Demat Account

All the shares purchased in your portfolio shall be held in your demat account maintained with us. The said account shall be operated on the basis of a Power of Attorney executed in our favour. All the transaction charges pertaining to the demat account shall be debited to your portfolio account at the end of every month.
Nomination

The account nomination will be registered in the demat / PMS account opening form. The same can be altered at any time by providing details of a new nominee.
Dividends

The dividends earned against the investments would be directly credited to your bank account, as per details provided by you in your demat account opening form. The bank account details can be updated at any time by submission of a required updation form.
Portfolio Composition

At any given time, the funds would be invested in a portfolio of 20-25 securities which would include a mix of mid-caps and large caps. The ratio between the same would vary from 40% to 60% depending on how expensive the markets appear.
Portfolio Turnover Ratio

Investments are made only with a long-term perspective and all the capital gains realised during the year would primarily be long term. Consequently, the portfolio turnover ratio for the year would also well below 1.
Exclusions

You may also specify companies / sectors in which you would not want us to invest in.
Reports and Statements

You shall be sent the following reports & statements at the end of every month. Performance summary of your portfolio Holding statement of your demat account. Transaction statement of your demat account Demat account, charge statement Contact notes for all transactions effected during the month Certified Capital Gains Statement and Statement of Accounts at the end of the year. * Reports can also be sent against specific request before the month end.
Taxes

We do not undertake any responsibility towards tax treatments and tax liabilities of the client and the same shall have to be taken care of by the client himself.
Risk / Return

Though all efforts will be made to outperform the benchmark index, there is no assurance of any fixed / minimum return on the investments. Further, equities being a risky asset class, there is also a risk of capital erosion and hence investors are advised to take investment decisions accordingly.

Getting Started!

Some paperwork, signatures and a few photographs; but it's one time.

Give us a call or drop a line and we will get it rolling.

Documents at a glance

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KB Capital Markets Pvt. Ltd.