Portfolio Management Services (PMS)

Portfolio Management Service

A Customized Solution to Your Investments in Equity and Fixed Income Instruments.

As a licensed portfolio manager, Kriti Capital manages over NPR 570 million of funds of individual and institutional investors who aim to build a diversified portfolio with minimized risk and maximized returns.

WHAT WE DO?

We will assist you to identify your needs, determine your risk profile, define your objectives, and finally, set your investment strategy. We work diligently to ensure optimal returns on your investments by building your portfolio from a range of asset classes, such as equity and fixed income instruments. You can choose between the following two unique services that suit to your requirement at best:

  1. Discretionary Portfolio Management
  2. Non-Discretionary Portfolio Management

 

Discretionary Portfolio Management

The Discretionary Portfolio Management platform allows you to delegate managing your investments to us:

OPTIMUM RETURN THROUGH LIMITED RISK

Our Discretionary Portfolio Management Service leverages our extensive investment resources, thorough financial research, and risk management expertise to deliver tailored investment solutions. You define your investment objectives and entrust us with managing your assets according to the selected strategy. We monitor your investments actively, execute transactions timely, and ensure that your investment objectives are achieved. Under this discretionary portfolio management service, we offer tailor-made portfolios that cater to individuals as well as institutional investors.

PROFESSIONAL INVESTMENT SERVICE OFFERING:

  • Experienced team of investment specialist and portfolio managers.
  • Wide-range of investment solutions as per your risk appetite and financial objectives.
  • Professionally managed customized portfolio ensuring you a personalized service.
  • Constantly reviewed and analyzed investment to ensure your portfolio remains on track.
  • Weekly updated online portfolio portal to keep you up-to-date.

Non-Discretionary Portfolio Management

The Non-Discretionary Portfolio Management Service allows you to enjoy a greater degree of participation in your portfolio.

GEARED TO YOUR OBJECTIVES & NEEDS

We help you define your investment strategy, and you will enjoy a complete discretion to your investment transactions. You are in complete control of your investment decisions, while we act as a custodian of your investment —executing your orders, facilitating your transactions, and relieving you of all clerical hassles. For optimized returns and minimized risk, we provide our insights geared to your objectives. This service is also made to cater to individuals as well as institutional investors.

A CONSULTATIVE METHOD OF INVESTING SERVICE OFFERING:

  • Execution of transaction as per your discretion.
  • Flexibility of making investment decisions based on analysis of investment expert.
  • Opportunity to learn investment rationale from a team of dedicated investment consultants.
  • Regularly monitored and hassle-free portfolio management service.

Portfolio Management Services (PMS) is a wealth management services offered by licensed Portfolio Manager. Kriti Capital & Investments Ltd., licensed to render such services, provides services to Nepali citizen or Nepali institution interested in investing in Nepalese stock market and/or fixed income instruments. The services offered in this helps our clientele define, strategize and meet their investment objectives.

A Portfolio Manager is a company (merchant banker) licensed by Securities Board of Nepal (SEBON) that provides Portfolio Management Services (PMS) to individual and institutional investors. Portfolio managers are governed and supervised by SEBON. They work based on the evidence and findings generated through investment research to cater their clients’ customized needs. This framework of work also helps make investment decisions to get optimized returns while minimizing risks.

When an investor invests through PMS Service, the investor owns the underlying securities (company shares and cash in a bank account) in his/her name. But, an investor invests in mutual funds, she/he owns units of the fund and does not directly own underlying company shares. The stocks are purchased by the Portfolio Manager on behalf of and in the name of the investor. All dividends will also be directly credited to the investors’ bank account (operated under portfolio management service agreement). All the shares will be held in the investors’ DEMAT account and can be accessed by the investor at any time.

An investor interested in investing in Nepali capital market through Portfolio Manager enters into an Agreement with the Portfolio Manager, and hands over the funds (shares and/or cheques) to be managed.

The Portfolio Manager opens a new bank account, DEMAT, and broker account in the investor’s name and operates it within the PMS Guidelines – solely for the purpose of portfolio management. The fund is professionally managed by the Portfolio Manager under guidelines set by the investor in terms of the investment horizon, return requirements and risk appetite. Stocks are purchased and sold on investors’ behalf after thorough analysis.

Apart from this, the Portfolio Manager applies in IPOs/ FPOs / auction on investor’s behalf. The Portfolio Manager also collects bonus shares & cash dividend and applies for rights shares against the shares held in the client’s portfolio account, thereby relieving the investor of all clerical hassles.

  • Discretionary Portfolio Management Services:

The Discretionary Portfolio Management platform allows investors to delegate Kriti Capital the investment fund with total confidence of managing. Investors define their investment objectives and entrust Kriti Capital with managing their assets according to the selected strategy. Kriti Capital makes buying or selling decisions for the portfolio based on thorough research and analysis of the market. Leaving the discretion for investments on the Portfolio Manager enables faster reaction to market trends and news.

  • Non-Discretionary Portfolio Management Services

The Non-Discretionary platform is a unique method of investing. It allows investors to have a complete discretion towards instructing investment transactions and tailor their portfolio. This is often based on the advisory and research based analysis of Kriti Capital. The Portfolio Manager helps the investors in defining long-term investment strategies based on the investment analysis of the market conditions and future outlook. The Portfolio Manager also provides information on the market and securities to facilitate investment decisions. The investor has final say in the purchase/sell orders and monitors his/her transactions. The Portfolio Manager provides its insights, offers bespoke solutions as well as relieves investors off clerical hassles.

For Discretionary Portfolio Management Service, a total of three different types of fees are charged. The types of fees include Administrative fees, Annual Management fees, and Performance fees.

Administrative fees: One-time fee of NPR 1500.00/- per client for administrative and clerical expenses related to the portfolio.

Annual Management fees: Charged annually on the fund amount, Annual Management Fees range from 1.00% to 1.50% of Gross Investment Amount. This is the cost paid to the portfolio manager for having your investment professionally management for one complete year.

Performance fees: Fee charged annually or at the termination of the portfolio by the Portfolio Manager on excess return above the Benchmark Return or the Hurdle Rate.

 

For Non-Discretionary Portfolio Management Service, a total of two different types of fees are charged These types of fees include Administrative fees and Annual Management fees.

Administrative fees: One-time fee of NPR 1500.00/- per client for administrative and clerical expenses related to the portfolio.

Annual Management fees: Charged annually on the fund amount, Annual Management Fees range from 1.00% to 2.50% of Gross Investment Amount.

Yes! The Portfolio Management Service is completely transparent! Once all accounts are set up, and Kriti Capital starts trading on investors behalf, Kriti Capital provides investors with a username and password to login into its PMS online portfolio portal. Investors can use this portal to view their weekly updated portfolio status which includes transactions made on their behalf, as well as available cash balance details.

Yes, they can! If the shares are in physical form, the Portfolio Manager will proceed with dematerialization, followed by portfolio management. If the shares are already dematerialized, the Portfolio Manager will proceed with the BO-BO transfer of these shares from current DEMAT account to the one opened at Kriti Capital for portfolio purposes.

Investors have the facility to withdraw profits annually. As for termination, investors are requested to inform the Portfolio Manager whether they want us to liquidate the stocks or entrust them without liquidation. Kriti Capital will proceed accordingly, and the process takes around 15 days from day termination notice is received.

Yes, all investments in the capital market are subjected to market risks. These risks include possible erosion of the principal amount invested as well as an opportunity cost in terms of forgone returns. Unlike fixed income instruments, stock investment does not guarantee fixed returns. Taking long-term horizon with managed risk while investing in stocks, however, usually brings significant and compounding returns over the years.

Among many of such probable causes, the following are the major:

  • Supply and demand in the market for the specific stock (shares)
  • Earnings and expectations of stockholders/ market investors
  • Sentiments and attitudes of people in the market
  • Economic indicators of the country and
  • The mentality of the overall mass (investors).

Deciding the right amount of risk you handle while also remaining comfortable with your investments is very important. The risk/return tradeoff is the balance between the desire for the lowest possible risk and the highest possible return

The risk/return tradeoff could easily be called the 'ability-to-sleep-at-night test'.  While some people can handle the equivalent of financial skydiving without batting an eye, others are terrified to climb the financial ladder without a secure harness.

Shares provide great diversification to one's earnings (investments), apart from job/salary, business, land/house, gold/silver, etc. Shares are highly liquid, so one can sell them instantly whenever needed.

The return on investments (on average) in the market are significantly higher than inflation, savings, and treasury bonds despite regular ups and downs in the market.

Through in-depth and systematic analysis and wisely crafted investment strategy, one can attain superior returns while minimizing risk in stock market investments.

 

 

  • Set Investment Goals:
    The first step towards investment is setting out investment goals. Investment goals are very important to mark the desired success.  It’s like creating a road map like, whether the investor is buying a house, buying a car, saving for retirement purpose or for kid’s college fund from the investment. The investors should understand their investment objectives (capital preservation, regular cash flow requirement, wealth maximization, etc.) and investment horizon. Based on the investment objectives and the horizon, investor should formulate strategies (short-term, long-term, loss/profit booking, IPO/FPO/auctions, analysis modality, etc.)

    Assess Risk Appetite:
    All investments involve some degree of risk. Investors' goals decide their risk taking ability. A rule of thumb in investment can be laid out as higher the risk of an investment, the higher potential for higher return or losses. Not everyone, however, can take risks with their money over to a certain level. Not everyone can handle the ups and downs of the capital market. To some investors, risking their money against a potential higher rate of return may not be worth the stress that follows along with, while some investors tolerate the risk of losing money for the possibility of gaining higher returns. For the latter kind of investors, aggressive investments such as growth stocks are the best option.

    Diversification:
    As the saying goes, “Don’t put all your eggs in one basket.” Diversification means distributing investment fund across different categories of stocks. The different categories could include different industries, different size of companies, different geographies the companies operate in, different business models, etc. Proper diversification helps minimize unsystematic risks.

    Consult a Portfolio Manager:

    It is advised to entrust investment fund to a portfolio manager, who will professionally manage the fund if an investor:

  • Doesn’t have sufficient time or expertise for all the associated risks and activities,
  • Doesn’t want to spend down time for investment management; and
  • Doesn’t want all the mental pressure from handling one’s own fund.

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