Morningstar starts portfolio management service in India

Pedro Gonçalves
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Morningstar starts portfolio management service in India

Morningstar is looking to  build an asset base of Rs 1,000 crore (£110m) for its newly-launched portfolio management service (PMS) arm over the next three years.

Morningstar Investment Adviser, a subsidiary of independent investment research provider Nasdaq-listed Morningstar Inc, is launching four risks-aligned multi-asset portfolios build with mutual funds, including balanced, growth, aggressive and aggressive plus portfolios.

India is the fifth country where it has launched the PMS business after some developed markets.

Over the next two to three years, we are targeting to have an asset under management of Rs 1,000 crore"

"Over the next two to three years, we are targeting to have an asset under management of Rs 1,000 crore," its director Dhaval Kapadia told reporters.

"With a variety of risk-tolerance profiles, our managed portfolios reflect our valuation-driven asset allocation and investment selection expertise. We leverage Morningstar's depth of resources, research and investment expertise to build investment strategies designed to deliver great outcomes for investors," he added.

The Active range of Managed Portfolios will follow a multi-asset investment strategy by investing in asset classes such as domestic equity, fixed income, cash, international equity and gold which will be based on Morningstar's valuation-driven asset allocation approach.

Kapadia said the company has taken a PMS licence from capital markets regulator Sebi and will be selling its services through financial advisers.

The minimum ticket size will be Rs 25 lakh, he said, adding the funds will be deployed in mutual funds focused on a variety of asset classes such as domestic fixed income and equities, foreign equities and also gold.

The universe of portfolio holdings include direct plans of actively- and passively-managed mutual funds in India. Morningstar will charge a management fee of about 1%, which will cover its fund management fee and financial adviser's commission. It will also levy an exit load of 1% if an investor withdraws investment within one year.

The PMS services will be sold only through financial advisers. It has about 2.55 lakh registered financial advisers and 13,000 paid premium members.