Mutual funds are very popular — but do they suit everyone? Well, not exactly. If you’re an HNI (High Net Worth Individual), then a Portfolio Management Service, or PMS Service in Jodhpur, may be more suitable. But then again, to each their own. Let’s compare both — mutual funds vs PMS — so you can see which might work better for you.
What are the two options?
Mutual Funds
● In simple terms, you pool your money with many investors and a fund manager invests it in equities, debt, or hybrid instruments.
● They are accessible: minimum investment could even be quite small via SIPs (Systematic Investment Plans).
● They work with broad strategies and are regulated by Securities and Exchange Board of India (SEBI) with clear rules.
PMS (Portfolio Management Service)
● This service offers a customised portfolio just for you, based on your risk appetite, investment objective, and the portfolio manager’s strategy.
● The investment requirement is high (minimum corpus), and you directly own the securities (in many cases).
● The best portfolio management services in Jaipur are more tailored, more flexible, but also involve more responsibility and cost.
Key Differences: Mutual Funds vs PMS
Here’s a side-by-side comparison to highlight how the two differ:
| Feature | Mutual Funds | PMS |
| Minimum investment | Low – accessible to ordinary investors. For example, SIPs from small amounts. | High – typically Rupees 50 lakh or more in India. |
| Customisation | Very little customisation – all investors in the scheme follow the same portfolio. | High degree of customisation – portfolio is tailored to individual investor. |
| Diversification | Usually good diversification across many stocks/sectors. | The portfolio may be more concentrated (fewer stocks, more focused bets) because it is customised. |
| Fees / Cost | Lower cost generally (expense ratio plus standard loads etc) | Higher cost — management fee + performance fee, higher minimum, more direct involvement. |
| Risk / Return Potential | Moderate risk (depending on fund type) – suitable for broad investor base. | Higher risk and higher potential return – suited for investors comfortable with that. |
| Ownership & Transparency | Investor owns units of the fund, not the underlying securities directly. | Investor often owns the actual securities via demat account; more transparency and direct ownership. |
| Liquidity & Access | Very good liquidity in mutual funds (open ended schemes) | Could be less flexible; depends on strategy; not always as liquid as mutual funds. |
Which is Better for Which Investor Type?
Well, it all depends on your profile as an investor. Ambition Finserve can help you invest in both products as per your risk profile.
Go for Mutual Funds if you are:
● A “regular” investor (not huge corpus) looking for an organized, simple way to invest.
● Someone who prefers less complexity and wants to leave the detailed investing to professionals.
● Comfortable with moderate returns and moderate risk.
● Looking for good diversification and lower cost.
● Someone who wants liquidity and less manual involvement in investment decisions.
Consider PMS if you are:
● An HNI (High Net Worth Individual) with a large investible corpus (Rupees 50 lakh+ or more) ready to commit.
● You want a customised portfolio tailored to your goals, risk, preferences (e.g., you may want aggressive growth, sector bets, specific stocks).
● You are comfortable with higher risk in return for possibly higher returns.
● You are okay with paying higher fees for specialised service, transparency and a dedicated manager.
● You are comfortable with periodic review, maybe less diversification but more targeted strategy.
● You might prefer direct ownership of securities and closer involvement/monitoring.
Specific to Local Considerations
● Mutual funds are easily accessible across India including smaller cities via digital platforms, agents, etc.
● For PMS services, you may require an advisor/broker or wealth-manager who caters to HNIs and has presence or contacts nearby. Local service quality, personal interaction may help.
● If you are an investor with moderate savings and future goals (child’s education, retirement, house etc.), mutual funds likely make more sense.
● If you have a large surplus, and you prefer local personalised service, PMS could be viable — just ensure you pick a credible PMS manager (track record, transparency).
● Taxation, regulatory compliance and costs apply equally, but local advisor support (for either option) helps.
Conclusion
At the end of the day: there’s no one-size-fits-all. Mutual funds and PMS are different tools built for different users.
In short: For most retail investors, mutual funds will be the go-to. PMS is more of a premium option for those with larger resources and appetite for custom investing. Choose wisely, keep your goals in sight, and invest with clarity.
FAQs
Q1. What are the major cost differences between PMS and Mutual Funds?
A: Mutual funds usually charge an expense ratio, which covers fund management and operational costs. PMS, however, can charge both management fees and performance fees, making it more expensive.
Q2. How is taxation different for PMS and Mutual Funds?
A: In mutual funds, investors pay capital gains tax only when they sell their fund units. In PMS, since you directly hold the securities, each buy/sell transaction is considered individually for taxation — leading to more frequent tax events.
Q3. Can PMS and Mutual Funds be part of the same portfolio?
A: Yes. Many HNIs use both. They keep mutual funds for steady, diversified growth and add PMS for aggressive, personalised strategies. This mix helps balance risk and return.
Q4. How can an investor in Jodhpur choose between PMS providers?
A: Always check the track record, investment philosophy, fee structure, and transparency of the PMS provider. Look for AMFI/ SEBI-registered professionals with consistent performance and clear communication when you choose a financial services provider.
