Mutual Fund Vs PMS: Equity investment is considered as one of the best options for an investor to beat the average growth of inflation. However, for those who cannot invest in equities directly, mutual fund investment is the route they go for. But, in the post-Covid scenario, a good number of investors have intensified direct investment in the stock market. Hence, the demand for Portfolio Management Services (PMS) from investors has also increased. In such a situation, it becomes necessary for an investor to understand which one is better for him.
Mutual Fund Vs PMS Comparison
compared to mutual funds and PMS, Pankaj Mathpal, MD & CEO, Optima Money Managers said, “Both have the potential to beat the average rate of inflation growth, but for mutual funds, an investor does not require a demat account whereas for PMS For mutual funds, an investor invests in a scheme and the fund manager invests in the stock market, charging the investor through the expense ratio mentioned in the plan. But, in case of PMS, a The investor has to appoint a fund manager, thereby conferring on him his power of attorney to invest in the stock market on behalf of the investor.”
Pankaj Mathpal of Optima Money Mangers said PMS requires the least 50 lakhs for investment. To buy and sell the stock the investor has to pay all the brokerage and taxes.
On how much charges one has to pay for PMS, Pankaj Mathpal said, “In mutual funds, fund managers charge an investor through the expense ratio of the scheme which ranges from 0.50 per cent to around 2.50 per cent. In case of PMS In the U.S., the manager providing the fund portfolio management service will charge approximately 2 to 2.5 percent of the transaction value, which applies to both the purchase and sale of the stock (irrespective of the investor’s profit or loss).
Vineet Khandare, CEO and Founder, MyFund Bazaar, said, “Even though PMS offers greater flexibility, mutual funds are tightly regulated and more cost-effective; they are one of the most appropriate ways to take passive risk in capital markets. While there are a number of sub-categories with equity oriented mutual funds, a diversified mutual fund diversifies across stocks and sectors while providing an opportunity to generate benchmark beating returns by proactive management.
Mutual Fund Vs PMS Returns
On what returns can be expected from PMS, Pankaj Mathpal said, “In the long run, an investor should expect 2 to 2.5 per cent higher returns from PMS as compared to mutual funds as PMS mutual fund investments. I’m more expensive.”