State of PMS in India

This story has an interesting background. A few days back, I was trying to render my services to one of those Portfolio Management Services, showing my experience as a semi-quant guy, plus my experience in system development.

Well, it run up quite a bit. At the beginning they said, I didnt have much fundamental analysis competencies I gagged but well, filled it up. But I was very wary of such a professional asset management system where FA is given such a huge emphasis. Then well, they oversaw my graduation degree and said, “Sorry bro, no go.. You aint got an MBA”

Well, in a way I am thanking my stars. I think, I would not have really fitted well, with my hedge fund oriented thinking of absolute returns in an environment of relative returns. Active fund management as is practiced in India, is a poor cousin of that being practiced in West.

Today I came across, an article on Economic Times, which talks about the recent predicament/problem of the asset managers. In order to provide the clients with a return greater than risk free rate, they seem to be selling their rather overcharged service. Given this, I am forced to rethink and evaluate the potential market for more sophisticated and active wealth management like Hedge Funds. I am quoting a few lines.. but do give the entire article a read. Here

“Softening interest rates have made it tougher for capital protection schemes, run by portfolio management service (PMS) providers, to have an edge over fixed income instruments. Capital protection products invest most of their money in fixed income instruments to preserve capital while using remaining funds to trade in equity options to deliver better returns than debt.”