SEBI's glitzier funds can doom PMSes

Dark clouds loom over the PMS (short for Portfolio Management services) industry. Ever since SEBI, the capital markets regulator, proposed on Tuesday (July 16, 2024) to build a slightly more gentrified version of mutual funds, PMSes appear shaky. Here's why: Lower entry barrier: While a potential investor needs at least Rs 50 lakh to invest in PMSes, the new asset class will require a significantly lower amount. As of now, SEBI proposes a minimum investment of Rs 10 lakh. Broad-ish investment mandate: Although PMSes have a plethora of investing strategies, the 'new asset class' will not be far behind. As of now, SEBI has suggested two investment strategies for the new investment option: Long-short equity fund: Depending on the view on markets and sectors, it can go long in one sector and short in another. For example, it can invest in both the Financi