Understanding Discretionary vs Non‑Discretionary PMS

As more High Net Worth Individuals (HNIs) move beyond mutual funds into Portfolio Management Services (PMS), one of the first decisions investors face is choosing between Discretionary and Non-Discretionary PMS.

Both models offer professional management, but they differ significantly in terms of control, flexibility, and investment execution. In this post, we’ll break down the differences, advantages of each, and why we at Xylem Investments have chosen to offer a Discretionary PMS model.

What is Discretionary PMS?

In a Discretionary PMS, the portfolio manager takes full responsibility for investment decisions. Once the investment mandate and risk profile are agreed upon, the manager executes all buy/sell decisions without requiring approval for every transaction.

✅ Manager has autonomy to act swiftly

✅ Aligned with the strategy and objectives defined at onboarding

✅ No operational delays due to investor intervention

At Xylem, we believe this is the most efficient way to generate long-term alpha.

What is Non-Discretionary PMS?

In a Non-Discretionary PMS, the manager provides advice and suggestions, but the investor must approve each trade before it is executed.

✅ More control for the investor

✅ Suitable for those with strong market knowledge or preferences

❌ Slower execution, which can result in missed opportunities

❌ Operationally more intensive for both investor and manager

Key Differences at a Glance

Feature	Discretionary PMS	Non-Discretionary PMS
Execution	Done by manager	Requires investor approval
Speed	Fast and efficient	Slower due to communication
Investor Involvement	Low	High
Flexibility	Manager-driven	Investor-controlled
Best For	HNIs seeking hands-off, professional management	Investors wanting control and involvement

Why We Believe in Discretionary PMS

At Xylem Investments, we operate a Discretionary PMS through our Xylem Maverick Strategy, for the following reasons:

1. Faster Decision-Making in Dynamic Markets

Markets don’t wait. A discretionary structure allows us to act quickly on opportunities or manage risk without delays.

2. Focus on Strategy, Not Emotions

Many investors tend to buy late and sell early. Discretionary management removes emotion-driven decisions and sticks to a disciplined, research-led framework.

3. More Scalable and Consistent Execution

Discretionary PMS lets us maintain uniform portfolios across investors and optimize at the portfolio level rather than in fragmented ways.

4. Lower Operational Friction

No back-and-forth on every trade. This makes the experience smoother for both the investor and the fund manager.

Common Misconceptions About Discretionary PMS

“Will I lose control over my money?”No. Your funds and securities are held in your own demat and bank account. You have full visibility and ownership.

“What if I disagree with the manager’s calls?”The manager follows a predefined investment strategy and mandate agreed at the start. Regular performance reviews and transparent reporting help build accountability.

Final Thoughts

Choosing between Discretionary and Non-Discretionary PMS depends on your:

• Risk appetite

• Market understanding

• Time and involvement preference

• Trust in the manager’s capability

If you’re someone who values expertise, consistency, and hassle-free investing, Discretionary PMS may be ideal for you, especially when it’s run by a team deeply aligned with your interests.

👉 Book a consultation with our team at Xylem Investments to explore how our discretionary PMS strategy can work for you.