Portfolio management is not a new word for investors who constantly deal in the investment sector. In a layman’s language portfolio management is all about planning and management of investments of an individual by experts. A portfolio deals in multiple investment options like bonds, shares, mutual funds etc. On the other hand when a person looks at mutual funds alone, he is only concentrating on one form of investment. These however give the investor the opportunity to spread his money in a range of companies.
At present there are numerous companies offering professional portfolio management services to their clients. How these score over the one way mutual fund investment option is mentioned below.
Splitting risk: When a person opts for portfolio management services, he can decide to go for a wide range of options. Suppose he is not willing to take much risk, his portfolio manager will design a financial plan suiting his needs. Or if someone wants to move from the fixed gains domain to the high risk high returns arena, he can take calculated risks with the help of an expert. Such expert services give a clear picture to investor on whether it is worth taking the risk or it is better to take a slow approach.
In case of mutual funds the risk is split amongst companies. For instance if a person decides to purchase mutual funds of oil and gas sector, he will get the choice to Cloud Services choose amongst the companies who are offering the opportunity. In case of mutual funds the performance of the sector decides how much gains will be earned. So even if the risk is split in companies, any influence in the sector will affect the returns.
Fixed fee involved: When investors seek advice from portfolio managers there is a fixed fee set. At times the fee structure is also a fixed percentage of profits earned. This amount is most of the time considered as an investment rather than a fee. It is better to pay experts for their valuable inputs rather than self managing funds in the risky capital markets after all. Portfolio management services work towards making investments convenient for their clients and have a fair fee policy.
In case of mutual funds there are many stages involved like creating opportunities, involving investors through adverts, undertaking the distribution process etc. All this involves a lot of costs, only after the deductions of these expenses the returns reach investors. This is a continuous process and investors have to bear it.
The above mentioned points indicate how portfolio management services can be a better companion in your investment journey. Their main aim is to grow your money by systematic analysis in case of mutual fund investments there isn’t so much flexibility. Every individual wants to explore the lucrative options markets are offering and one would not prefer to put his money in a single form of investment practice.