PMS versus Mutual Funds: Portfolio Managers Perform Better on Long-Term Gains

Recent research indicates that Portfolio Management Services (PMS) have outperformed mutual funds in different time periods and categories consistently. In a 10-year period, high-performing PMS schemes earned Rs 30.77 crores from an investment of Rs 2.5 crore, beating mutual funds by Rs 8.75 crores. PMS investment strategies surpassed their benchmarks by 70% on average for all time periods, versus 48% for mutual funds. PMS performed better than mutual funds by 91% vs. 41% in the small-cap space over a 3-year time horizon. Though they charge higher fees, PMS provides more tailored strategies and focused investments that could result in higher returns. But PMS is also associated with greater risk and a longer time horizon to investment. This trend of outperformance reflects the increasing popularity of PMS among high-net-worth investors who desire more active management of their investments.

 

Source: MoneyControl, Economic Times, PMS AIF World