PMS Fees Illustration
Calculation
| Particulars | Values | ||
|---|---|---|---|
| i | Capital Contributed / Assets under Management | i = a | ₹10000000.00 |
| ii | Gain / (Loss) on Investment based on the Scenario | ii= i*g | ₹2000000.00 |
| iii | Gross Value of the Portfolio at the end of the year | iii= i + ii | ₹12000000.00 |
| iv | Average Assets Under Management | iv= (i + iii) / 2 | ₹11000000.00 |
| v | Other Expenses | v= iv x c | ₹-55000.00 |
| vi | Brokerage and Transaction cost | vi= iv x f | ₹-22000.00 |
| vii | Management Fees | vii = (iv + v + vi) x b | ₹-163845.00 |
| viii | Total Charges Before Performance Fee | viii = v + vi + vii | ₹-240845.00 |
| ix | Gross Value of the Portfolio before Performance fee | ix = iii + viii | ₹11759155.00 |
| x | High Water Mark Value (HWM) (Capital contributed for 1st year and second year onwards as defined in the PMS agreement. | ₹10000000.00 | |
| xi | Hurdle Rate of return or as defined in the PMS agreement | xi = i x e | ₹1000000.00 |
| xii | Gross Value of the Portfolio before Performance fee is greater than High Water Mark Value + Hurdle rate of return | xii = ix > (x+xi) then Yes else No P Fees | Yes |
| xiii | Portfolio return subject of Performance Fee | xiii = ix - x - xi | ₹759155.00 |
| xiv | Performance Fee | xiv = xiii x d | ₹-113873.25 |
| xv | Net value of the Portfolio at the end of the year after all fees and expenses | xv = ix + xiv | ₹11645281.75 |
| xvi | % Portfolio Return | xvi = ((xv - i) / i) % | 16.45% |
| xvii | High Water Mark to be carried forward for next year. When performance fee is charged from the portfolio itself. | xvii = Max (x , xv) | ₹11645281.75 |
| xvii | High Water Mark to be carried forward for next year. When performance fee is paid separately by the investor to the PM. | xvii = Max (ix , x) | ₹11759155.00 |
Notes:
- Management Fee is assumed to be charged annually in the illustration. However, it can be charged at any frequency (Daily, Monthly, Quarterly, Semi-annually, Annually) as defined in the PMS agreement and permitted under SEBI regulations.
- Management Fee can be based on Average portfolio value or closing portfolio value, or other methods as defined in the PMS agreement.
- Returns are assumed to be generated linearly throughout the year.
- Other Expenses include Account Opening charges, stamp duty, Audit Fee, Bank charges, Fund Accounting charges, Custody Fee, demat charges, or other miscellaneous expenses.
- Brokerage and transaction costs are illustrated based on Average AUM but are charged on actual trades.
- All Fees and charges are subject to GST.
- High Water Mark for the 1st Year is the Capital invested. For subsequent years, it is the year-end closing value after all charges and fees, unless otherwise defined in the PMS agreement.
- Hurdle Rate is calculated based on the Higher of (HWM or previous year closing capital), but may differ as per the PMS agreement.
- Hurdle Rate is prorated if the performance fee period is less than 1 year or if there are inflows/outflows from the portfolio.
- This illustration shows High Water Mark carry forward scenarios for fair treatment of the investor.
- This is a generic illustration; each portfolio manager may modify it as per their PMS agreement terms and conditions.
- Portfolio Managers should also refer to the illustrations in Annexure 4A of the Master Circular for Portfolio Managers dated June 07, 2024.
Frequently Asked Questions
A portfolio management services fees calculator is an online tool that estimates fees like management and performance fees, helping investors understand the cost structure of PMS investments.
A PMS fees calculator works by taking inputs like the investment amount, fee percentages, and expected returns to calculate total fees and net returns, providing a clear cost breakdown.
Using a portfolio management services fees calculator provides transparency, allows fee comparison, and aids in financial planning by estimating potential returns after fees.
A PMS fee calculator helps investors evaluate the cost of portfolio management services, making it easier to analyze fees and optimize their investment decisions.
To use a PMS fees calculator, inputs like investment amount, management fee, performance fee, expected returns and investment tenure are required.
Yes, a portfolio management services fees calculator can compare fee models, such as fixed, variable or performance-based fees, to determine the most cost-effective option.
A portfolio management services fees calculator uses the hurdle rate to calculate performance fees only if the portfolio exceeds the minimum required return.
A PMS fees calculator provides estimates based on inputs, but actual fees may vary due to factors like performance or additional charges.
Some PMS fee calculators include tax implications, while others focus only on fees. It's important to check if this feature are available when using the tool.
Yes, Anand Rathi's PMS fee calculator is free to use for everyone.
Using a PMS fees calculator is advisable to understand potential costs, net returns of all the expenses and then make well-informed investment decisions.