Question: What is "Portfolio Management" programs? How does it work?
“Portfolio Management Program” is an investment solution ran by a money manager who manages your account with your funds to achieve certain profit goal with his/her strategy.
“Portfolio” indicates the strategies of Money Manager, to manage funds.
If a person says he/she has got a certain strategy to manage funds as his/her portfolio, then it should be called as “Portfolio Management” provided by him/her though, normally it is an investment solution/program offered by financial companies.
Diversified portfolio with risks managed
There are many investment solutions which you can let other traders to manage your funds, such as “Copy Trading”, “PAMM” and “Automated Trading”.
And for investors, “Portfolio Management” can be included in the same category, although there are some merits that you may want to choose the “Portfolio Management” rather than other investment solutions.
1. Low risk and high performance
Of course, each financial company is offering their portfolio management programs as their products, so it needs to be something attractive, or who would invest funds with them?
There are performance fees charged on the profits though, these are still very reliable programs.
2. Risk Management
As it is a “Portfolio”, the company may invest in several financial instruments to reduce risks. Many financial companies opt to diversify their strategies and instruments to trade.
By setting Stop Losses for each positions, they wouldn’t take too much risk when managing clients’ funds.
There may be some bad days with losing trades though, many portfolio management programs achieve great profits in a long term.
Disadvantages of Portfolio Management?
Besides the high profits rates with diversified portfolio, there are of course some demerits for investing funds in this way.
It is the “Cost”
You may not be charged for using the service though, it is most likely that all financial companies deduct some funds from your account as “Performance Fees”.
It may be 30% or 50%, depending on the company and their strategies.
Many Social & Copy trading platform providers do not charge any to its users, but it is free to use the system for the users.
If you are interested in investing your funds to some “Portfolio Management Programs”, there are two popular ones as follows.
For the list of Social and Copy trading services, please go to the page below.
