The honest comparison
PMS or mutual funds? Often both.
We distribute mutual funds and manage a PMS, so we have no reason to push one over the other. Here is how they differ.
Side by side
Nine practical differences.
Neither structure is universally superior. The choice comes down to capital scale, desired control, and investment horizon.
| Parameter | Mutual funds | PMS (Portfolio Management) |
|---|---|---|
| Minimum | ₹500 (SIP) or ₹5,000 with us | ₹50 lakh (SEBI regulatory minimum) |
| What you own | Units of a pooled fund | Shares, directly in your own demat account |
| Number of stocks | Typically 40 to 80 companies | Typically 15 to 30 companies (focused) |
| Fees | Expense ratio, usually 0.5% to 2.25% | Fixed fee (2%) plus a performance fee above a 10% hurdle |
| Taxation | Only when you redeem units | On each sale the manager executes, in your hands |
| Transparency | Monthly factsheet, top 10 holdings with lag | Every single holding and transaction disclosed monthly |
| Customisation | None; identical portfolio for all unitholders | Some: negative exclusions and preferences can be agreed |
| Regulation | SEBI (Mutual Funds) Regulations | SEBI (Portfolio Managers) Regulations |
| Best for | Steady, automated wealth-building at any size | A concentrated, long-term direct equity allocation |
The question we actually ask
What is the money for?
If the answer is a house in three years, the conversation is about debt funds, not PMS. If it is 'I don't need this for ten years and I want to understand what I own', PMS may be the right next step.
Starting out
Mutual fund SIPs across two or three categories. Build the discipline and emergency reserves first.
Growing
A diversified mutual fund core, with a focused PMS allocation once your investable equity money crosses ₹50 lakh.
Established
PMS for direct ownership and concentration; mutual funds and fixed-income bonds for liquidity and preservation.
Next step