DPMS vs NDPMS: Know the Difference and Find the Right Fit for You?

Some investors want nothing to do with the daily ups and downs of the stock market. They have a demanding job or a business to run, and they would rather hand their equity portfolio to someone they trust and check in on it from time to time. Others feel the opposite. They read company results, follow sectors closely and don’t like the idea of anyone buying or selling stocks without asking them first.

Both groups can benefit from professional portfolio management, but they need it in different forms. That is where the choice between a Discretionary PMS (DPMS) and a Non-Discretionary PMS (NDPMS) comes in. Bonanza Wealth offers both. Here is how each one works, how they differ and how to work out which suits you.

What Is a Portfolio Management Service?

A Portfolio Management Service, or PMS, is a personalised service in which experienced portfolio managers and a research team manage equity investments for individual clients. The stocks sit in the client’s own name. That makes a PMS more tailored than a pooled product like a mutual fund.

Within PMS, the biggest question is who makes the final call on what to buy and sell. If the portfolio manager decides, it is discretionary. If the investor decides, it is non-discretionary. Almost every other difference flows from this one point.

How DPMS Works at Bonanza Wealth?

With Bonanza Wealth’s Discretionary PMS, the portfolio managers take charge of the whole process. They choose the stocks, decide on timing, keep track of the portfolio and rebalance it when conditions change. You aren’t asked to approve each trade, yet the portfolio remains fully visible to you.

Investors in DPMS can pick from two strategies. The Edge Strategy is a multi-cap approach that leans towards mid-sized companies. It looks for businesses where a special opportunity or growth trigger could meaningfully change how fast they grow, and it typically holds 15 to 20 stocks. The Aegis Strategy is also multi-cap. It looks for companies whose fundamental and technical strength gives them the potential to do better than the market and their peers over the near term. It usually holds 20 to 30 stocks, with most of the money in trending, quality growth businesses and smaller portions set aside for undervalued or turnaround ideas and tactical opportunities.

Risk management runs through the DPMS process. No single stock is allowed to take more than 10% of the portfolio, and exposure to any one sector is capped at 30% at cost. Purchases and sales are usually spread out over time rather than made in one go. If a stock falls sharply below its average purchase price, the team goes back and re-examines the business. Every holding is reviewed each quarter, along with the promoter’s track record and the wider economic picture. A stock may be sold when its growth story has played out, when the sector runs into trouble, when the valuation looks stretched or when a stronger opportunity appears.

How NDPMS Works at Bonanza Wealth?

Bonanza Wealth’s Non-Discretionary PMS keeps you in the driver’s seat. The research team studies companies using fundamental and technical analysis and suggests stocks that it believes have good growth potential. Nothing is added to your portfolio unless you agree with the idea and approve it.

This is not a model portfolio. There is no fixed template that every client follows. Your holdings are shaped by your own decisions, and the team works to keep them in line with how much risk you are willing to take.

Where NDPMS really helps is in the support around those decisions. Each client works with a dedicated Research Analyst, who helps with monitoring, rebalancing and execution and is available for one-on-one conversations about the portfolio. If you have your own stock ideas, the analyst can help you test them before you act. During volatile phases, the analyst can suggest adjustments, and holdings are reviewed on a monthly basis.

NDPMS clients also get access to Bonanza’s own research tools. A proprietary ranking tool scores each stock on returns, financial ratios, holding patterns, concentration risk and valuation, and flags weak stocks that may need replacing. The online portal at bonanzawealth.com/ndpms gives a round-the-clock view of the portfolio, so you can compare its performance with a benchmark and see how your money is spread across categories and sectors.

DPMS vs NDPMS: The Key Differences

Which One Should You Choose?

DPMS tends to suit people who value their time more than their involvement. Doctors, lawyers, senior executives, business owners and HNI families often fall into this group. They want a structured, professionally managed equity portfolio but don’t have the hours to track the market themselves. It also works well for NRIs who want their Indian investments looked after by a trusted local team.

NDPMS is a better fit for investors who like being hands-on. These are often people who have managed their own portfolio for a while and have reached the limits of doing it alone. They don’t want to give up control, but they would welcome deeper research, better tools and someone experienced to discuss ideas with before acting on them.

Both services draw on the same research base. Stocks are studied through Bonanza Wealth’s 5F framework of Growth, Financials, Quality, Holding and Valuation, and data is cross-checked against sources such as Bloomberg. The entire PMS team is led by our CIO and Fund Manager Achin Goel.

Summing Up

The choice between DPMS and NDPMS has little to do with which service is stronger and everything to do with how you like to invest. If you would rather leave the decisions to experienced portfolio managers and focus on your work and family, DPMS is the natural option. If you want to stay in charge of every stock in your portfolio while having solid research and a dedicated analyst behind you, NDPMS is likely the better match.

Think about how much time you can give to your investments and how involved you want to be. A conversation with the Bonanza Wealth team can then help you settle on the service that fits your goals and comfort with risk.

Blog Disclaimer:

The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Bonanza Portfolio  Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.

You can also join our community at LinkedIn, Instagram, and Twitter to stay updated.