Presenting the ASK Lighthouse Portfolio

A Portfolio Manager is a body corporate, which, pursuant to a contract with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary Portfolio Manager or otherwise) the management or administration of a portfolio of securities or funds of the client.

Professional Management: The service provides professional management of portfolios with the objective of delivering consistent long-term performance while controlling risk.

Continuous Monitoring: It is important to recognize that portfolios need to be constantly monitored and periodic changes made to optimise the results

Risk Control: A research team responsible for establishing the client's investment strategy and providing the PMS provider real time information to support it, backs any firm's portfolio managers.

Hassle Free Operation: Portfolio Management Service provider gives the client a customized service. The company takes care of all the administrative aspects of the client's portfolio with a periodic reporting (usually daily) on the overall status of the portfolio and performance.

Flexibility: The Portfolio Manager has fair amount of flexibility in terms of holding cash (can go up to 100% also depending on the market conditions). He can create a reasonable concentration in the investor portfolios by investing disproportionate amounts in favour of compelling opportunities..

Transparency: PMS provide comprehensive communications and performance reporting. Investors will get regular statements and updates from the firm. Web-enabled access will ensure that client is just a click away from all information relating to his investment. Your account statements will give you a complete picture of which individual securities you hold, as well as the number of shares you own

Customized Advice: PMS give select clients the benefit of tailor-made investment advice designed to achieve his financial objectives. It can be structured to automatically exclude investments you may own in another account or investments you would prefer not to own. For example, if you are a long-term employee in a company and you have acquired concentrated stock positions over the years and have become over exposed to few companies’ stock, a separately managed account provides you with the ability to exclude that stock from your portfolio.

1. Better handholding from his portfolio manager than he has been accustomed to either on his own or from his broker or mutual fund.
2. One can also expect to interact with the portfolio manager to discuss any concerns that he might have, though not frequently.
3. All administrative matters, including operating a bank account and dealing with settlement and depository transactions, will be handled by the Portfolio Manager.

The minimum ticket size of the portfolio we offer is Rs. 50 lakhs. There is no upper limit on the amount you can invest.

Initial corpus can be brought only in the form of funds or securities.

Under SEBI guidelines, a Portfolio Manager is allowed to invest in the Derivatives Segment only to the extent of the value of the portfolio. This has also been mentioned in the Disclosure Document and clients are advised to read it carefully before investing. However, our policy will be to use Derivatives only as a hedging strategy and will be restricted only to those portfolios which have a short-term outlook on the investment strategy.

Our Portfolio Management Schemes are designed from a long-term perspective, and we will invest in accordance with the objectives of each Scheme. It is advisable to keep any equity portfolio invested over a longer term because in the long run, equities outperform most other asset classes. Therefore, we will not indulge in any day trading activities under the Portfolio Management Service. Moreover, SEBI guidelines forbid any day trading activity by Portfolio Managers.

In discretionary portfolio management service, the Portfolio Manager individually and independently manages the funds and securities of each client in accordance with the needs of the client.

Under the non-discretionary portfolio management service, the Portfolio Manager manages the funds in accordance with the directions of the client.

The investment solutions provided by PMS cater to a niche segment of clients. The clients can be individuals or institutions with a high net worth.

The offerings are usually ideal for investors who are:

• Looking to invest in asset classes like equity, fixed income, structured products etc.
• Desire personalized investment solutions.
• Desire long-term wealth creation
• Appreciate a high level of service

The following investors are eligible to invest through PMS:

• Resident Individuals
• Hindu Undivided Families (HUF), Body Corporates (Private / Public)
• Registered Private Trusts • Non-Resident Indians (NRI)
• Partnership Firms or any other eligible investor

Management:

PMS	Mutual fund
Provides ongoing, personalized access to professional money management services	Provides access to professional money management services

PMS	Provides ongoing, personalized access to professional money management services
Mutual fund	Provides access to professional money management services

Customization:

PMS	Mutual fund
Portfolio can be tailored to address each investor's specific needs	Portfolio structured to meet the fund's stated investment objectives

PMS	Portfolio can be tailored to address each investor's specific needs
Mutual fund	Portfolio structured to meet the fund's stated investment objectives

Ownership:

PMS	Mutual fund
Investors directly own the individual securities in their portfolio	The trustee owns shares of the fund and cannot influence buy and sell decisions

PMS	Investors directly own the individual securities in their portfolio
Mutual fund	The trustee owns shares of the fund and cannot influence buy and sell decisions

Minimums:

PMS	Mutual fund
Significantly higher minimum investments than mutual funds. Minimum investment - ₹50 lakhs	Minimum investment - ₹5,000

PMS	Significantly higher minimum investments than mutual funds. Minimum investment - ₹50 lakhs
Mutual fund	Minimum investment - ₹5,000

Flexibility:

PMS	Mutual fund
PMS products can be customized to meet special customer requirements	No customization possible

PMS	PMS products can be customized to meet special customer requirements
Mutual fund	No customization possible

Taxation: (For more information on tax, please connect with your personal tax advisor):

PMS	Mutual fund
In the case of Portfolio Management investors must pay capital gain tax.	Mutual Funds have the benefit of Section 10 (23D) of the Income Tax Act as a pass-through entity so MFs are not subjected to taxation

PMS	In the case of Portfolio Management investors must pay capital gain tax.
Mutual fund	Mutual Funds have the benefit of Section 10 (23D) of the Income Tax Act as a pass-through entity so MFs are not subjected to taxation

Calculation of performance fee is done considering the high watermark principle. 'High Water Mark' is the higher of either 'corpus investment value' or 'highest portfolio value at which fees has been paid historically'

Illustration of how the High-Water Mark would work: A client's initial contribution is Rs 1,00,00,000, which rises to Rs 1,25,00,000 in its first year. Therefore, a performance fee would be payable on the Rs 25,00,000 return. Next year, the portfolio value drops to Rs 110,00,000. Therefore, no performance fee is payable. In the third year, the portfolio value rises to Rs 1,40,00,000. A performance fee is payable only on the profit over the previously achieved high watermark, i.e., Rs 1,25,00,000 less performance fee (including taxes).

Tabular form:

Number of year(s) of Investment	Valuation at the end of the Year	Initial Investment amount	Profit	Performance fee /High- water mark calculation
1st year (initial investment)	1,25,00,000	1,00,00,000	25,00,000
2nd year	1,10,00,000	--	Loss
3rd year	1,40,00,000	--	15,00,000	(1,40,00,000 – 1,25,00,000 High water)

SEBI (Portfolio Managers) Regulations, 2020 provide that the Portfolio Managershall charge a fee as per the agreement with the client for rendering portfolio management services. However, no upfront fees shall be charged by the Portfolio Manager directly or indirectly to the clients. The agreement between the Portfolio Manager and the client shall, inter-alia, also include the quantum and the manner of fees payable by the client for each activityfor which service is rendered by the Portfolio Manager directly or indirectly.

No for DPMS

Yes for NDPMS with upper cap of 25% of Assets under Management and subject to regulatory requirements.

The Portfolio Manager is required to accept minimum INR 50 Lacs or securities having a minimum worth of INR 50 Lacs from the client on the date of onboarding.

Yes, NRIs can invest in the PMS through the NRE or NRO accounts. There are some additional compliance/documentation requirements for NRI clients. Our relationship manager will help the NRI client with this documentation.

The Portfolio Manager shall furnish periodically a report to the client, as per the agreement, but not later than period of three months and such report shall contain the following details, namely: -

• the composition and the value of the portfolio, description of securities and goods, number of securities, value of each security held in the portfolio, units of goods, value of goods, cash balance and aggregate value of the portfolio as on the date of report;
• transactions undertaken during the period of report including date of transaction and details of purchases and sales;
• beneficial interest received during that period in the form of interest, dividend, bonus shares, rights shares, etc;
• expenses incurred in managing the portfolio of the client;
• details of risk foreseen by the Portfolio Manager and the risk relating to the securities recommended by the Portfolio Manager for investment or disinvestment;
• default in payment of coupons or any other default in payments in the underlying debt security and downgrading to default rating by the rating agencies, if any;
• details of commission paid to distributor(s) for the particular client.

You will receive a quarterly update on your PMS account Performance. There is also a web portal where you can login and view your account performance and NAV with a lag of one day.

The Portfolio Manager provides the client the Disclosure Document prior to entering into an agreement with the client. The Disclosure Document contains the quantum and manner of payment of fees payable by the client for each activity, portfolio risks, complete disclosures in respect of transactions with related parties, the performance of the Portfolio Manager and the financial performance of the portfolio manager for the immediately preceding three years.

The services of a Portfolio Manager are governed by the agreement between the portfolio manager and the investor. The agreement should cover the minimum details as specified in the SEBI Portfolio Manager Regulations. However, additional requirements can be specified by the Portfolio Manager in the agreement with the client. Hence, an investor is advised to read the agreement carefully before signing it.

No, a Portfolio Manager do not guarantee or indicate any guaranteed or indicative returns.. It has to be distinctly understood that investing in securities is a risky proposition and there exists a risk to the principal amount invested. Further, SEBI guidelines prohibits the portfolio manager from guaranteeing or indicating a return, either directly or obliquely.

The tax liability of a PMS investor would remain the same as if the investor is accessing the capital market directly. The investor should consult his / her tax advisor for the same. The Portfolio Manager ideally provides audited statement of accounts, Capital Gain / Loss Statement at the end of the financial year or on occurrence of such event requiring these statement to be shared to aid the investor in assessing his / her tax liabilities.

Yes. All investments involve a certain amount of risk, including the possible erosion of the principal amount invested, which varies depending on the security selected. For example, investments in small and mid-sized companies tend to involve more risk than investments in larger companies.

Investors can log on to the website of SEBI www.sebi.gov.in for information on SEBI regulations and circulars pertaining to Portfolio Managers. Addresses of the registered Portfolio Managers are also available on the SEBI website. Information on monthly reports submitted by Portfolio Managers to SEBI can be accessed at https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doPmr=yes.