Nov 22, 2014 10:12 AM
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I am sharing my experience with HDFC PMS especially for those aspiring to join HDFC PMS now. Sensex is nearly at its peak currently, similar situation when I joined HDFC PMS in November 2010.
I was approached by Relationship manager from HDFC Securities, Kanjurmarg. I was shown lucrative average returns of 10.6% for last 3 years despite of Sensex crashing during 2008–09. I transferred shares worth Rs. 10.2 Lakhs. Management Fee is 2.75% pm on total portfolio valuation. In one year’s time valuation of my portfolio crashed to mere 50% of initial investment even after paying hefty management fee. When I contacted HDFC Securities, I was advised to stay invested for 3 years to reap returns of 15% per annum.
At the end of 3 years, valuations did not rise even to 70% of initial investment, much lower than benchmark returns! When I took matter with HDFC Securities, they directed me to PMS division of HDFC Asset Management. I came to know that HDFC Securities are only marketing outlet and HDFC PMS is not bound by what HDFC Securities promise.
Portfolio Manager chose to remain invested in 6 Black ships in sluggish sectors then namely Capital Goods, Infrastructure, Power & Reality, consuming 25% of investment. PMS fund manager chose to remain invested without stop loss though funds in Black Ships fell by 50 to 75%! When asked about such lapses, HDFC PMS had no logical explanation. I took matter to top level and got temporary relief in management fee. However it was withdrawn within few months.
Though matter was reported to SEBI their roll was more of spectator.
Finally in mid August 2014, when sensex swung up, valuations of my portfolio reached nearly investment valuations, I decided to pull plugs. Though valuations had reached nearly initial investment , redeemed value was less by Rs.10, 000
