Which is better: Mutual Fund or Portfolio Management Services; find out here
PMS and mutual funds both are good investment options, but it will depend on individual circumstances and goals.
PMS and mutual funds are both investment options that allow you to pool your money together with other investors and invest in a variety of assets. In this article, we will discuss the key differences between both of them.
Mutual funds are a type of investment fund that pools money from multiple investors and invests it in a variety of assets, such as stocks, bonds, and money market instruments. Mutual funds are managed by a professional fund manager who is responsible for making investment decisions on behalf of the fund's investors.
Portfolio Management Services (PMS) are a type of investment management service where a professional portfolio manager invests your money on your behalf. The portfolio manager will typically have a high level of expertise in the markets and will use their knowledge to create a portfolio that is tailored to your individual needs and goals.
The key differences between PMS and mutual funds are:
Investment amount: The minimum investment amount for PMS is typically higher than for mutual funds. PMS may require a minimum investment of Rs 25 lakh or more, while mutual funds may have a minimum investment of Rs 500 or less.
Investment style: PMS offers more flexibility in terms of investment style. You can invest in a variety of assets, such as stocks, bonds, and real estate, through PMS. Mutual funds are typically categorized into different investment styles, such as equity funds, Debt Funds, and balanced funds.
Portfolio management: A professional portfolio manager manages your money in PMS. The portfolio manager will research the market and select the assets that they believe have the potential to grow. They will then invest your money in these assets on your behalf. In mutual funds, the fund manager manages the money of all the investors in the fund.
Fees: PMS charges higher fees than mutual funds. The portfolio manager charges a fee for managing your money, and the AMC (Asset Management Company) also charges a fee for managing the mutual fund.
Liquidity: PMS is less liquid than mutual funds. It may take some time to sell your investment in PMS, as the portfolio manager will need to find a buyer for your shares. Mutual funds are more liquid, as you can sell your shares easily on the stock exchange.
PMS and mutual funds allow you to pool your money together with other investors and invest in a variety of assets. However, it is important to do your research and understand the risks involved before investing in either PMS or mutual funds.