PMS is a type of investment service where a professional portfolio manager manages your investments on your behalf, typically tailored to your specific needs and risk profile.
Here are some key points to consider:
- Higher Returns: According to the data, the top five PMS funds have delivered annualized returns between 26-38 percent over a 10-year period. In contrast, the top five MFs provided annualized returns between 23-29 percent during the same time frame.
- Long-Term Investment: The comparison is made over a 10-year period, indicating that these investment options are more suitable for long-term wealth creation.
- Individualized Portfolio: PMS services offer a personalized portfolio tailored to the investor’s specific objectives and risk tolerance. This customization can lead to higher returns if the portfolio manager makes shrewd investment decisions.
- Higher Investment Requirement: PMS typically has a higher minimum investment requirement compared to mutual funds. In your example, a significant investment of Rs 2.5 crore was made.
- Risk and Volatility: Higher returns often come with higher risk. PMS portfolios may include a broader range of investment options, including riskier assets. Investors should be prepared for increased volatility in their portfolios.
- Expense Ratios: PMS services may have higher management fees and expenses compared to mutual funds. Investors should consider these costs when evaluating the net returns.
