I am 32 years old. I have a limited knowledge of mutual funds. Could you please advise me If I want to invest ₹30 lakh for a minimum period of five years. In the current scenario, which one is better -- PMS or mutual funds?
- Rahul Pandya
The only similarity between Portfolio Management Service (PMS) and mutual funds is that you hand over the money to a fund manger and he invests the money on your behalf. An investor can invest with as little as ₹500 in a mutual fund, whereas he would require a minimum ₹25 lakh to hire a PMS. Many people believe that PMS offers a great degree of customisation. However, this need not be the case always. Most PMS offers two or three investment choices to investors with limited funds. The real customisation is available only to very large investors. We believe that in the current scenario, mutual funds are far superior to PMS for a variety of reasons. Mutual funds are better regulated and much more transparent. You can also obtain information about mutual fund schemes very easily. However, you don't have much information available on PMS. You have to go by the claims made by the PMS provider. PMS can also be a costly affair.
For more, read: PMS Providers Hide More Than They Reveal.
Also, PMS v/s Mutual Funds.