A Step-by-Step PMS Comparison for the Indian Market

In India, many investors begin with savings accounts, fixed deposits, and gold, and later explore mutual funds and shares. 

As the investment amount increases, they may consider a more organised and personalised way to manage their portfolio, such as the Best PMS in India. 

Since PMS is managed by a SEBI-registered portfolio manager, it requires proper evaluation. 

The next sections explain a step-by-step method for PMS comparison (India).

Step 1: Choose the type of PMS 

PMS services can be classified based on who takes the investment decisions.

(A) Discretionary PMS

In discretionary PMS, the portfolio manager makes decisions on behalf of the client.

What it means:

• The manager buys and sells stocks without asking the client every time.
• The investor allows the manager to make decisions professionally.

Best for:
Investors who prefer professional management and do not wish to be involved in frequent approvals. Discretionary and non-discretionary categorisation is typically stated clearly in PMS descriptions and comparison lists, including those found on PMS AIF WORLD.

(B) Non-discretionary PMS

In non-discretionary PMS, the portfolio manager suggests actions, but the final decision is taken by the client.

What it means:

• The manager recommends a stock to buy or sell.
• The client approves it before execution.

Best for:
Investors who want more control and are willing to remain involved in decisions.

(C) Advisory PMS

In advisory PMS, the manager mainly provides guidance. The investor carries out transactions independently.

Best for:
Experienced investors who want professional advice but prefer executing decisions personally.

Step 2: Select a Portfolio Structure 

Different PMS products can have different portfolio structures. Portfolio structure refers to the number of stocks held and the distribution of investment across them.

(A) Concentrated PMS Portfolio

A concentrated portfolio means the PMS holds fewer stocks, usually around 10 to 15 stocks.

Advantage:

• Strong focus on the best ideas
• Higher return potential if the selection is correct

Risk:

• If 1 or 2 stocks perform badly, the portfolio may be affected significantly.

(B) Diversified PMS Portfolio

A diversified portfolio usually holds 20 to 40 stocks.

Advantage:

• Risk is spread across many holdings
• The portfolio becomes less dependent on one stock’s performance

Limitation:

• Returns may look moderate in the short term

In portfolio comparisons, some PMS services publicly mention typical stock count or diversification style. In organised comparison tables such as those available on PMS AIF WORLD, this aspect can also be observed indirectly through portfolio disclosures and stated approach.

Step 3: Understand PMS Strategies (How Portfolio Managers Invest)

Every PMS follows a strategy, and this strategy guides stock selection and holding period. Common PMS strategies in India include large-cap, medium, and small-cap, value, and growth approaches.

(A) Large-cap Strategy

Large-cap PMS invests in well-established companies.

Why is it chosen:

• Stable businesses
• Lower volatility compared to smaller companies

(B) Mid and Small-cap Strategy

These PMS products focus on growing companies that are smaller in size.

Advantage:

• Strong growth potential
• Can outperform in favourable market phases

Risk:

• Higher volatility
• Can fall sharply during corrections

(C) Value Strategy

Value-based PMS invests in stocks that appear undervalued compared to long-term fundamentals.

Why is it chosen:

• Often offers better downside protection
• Suitable for patient investors

(D) Growth Strategy

Growth-based PMS invests in companies that are expanding rapidly in revenue and profits.

Advantage:

• Strong compounding potential

Risk:

• High valuation can lead to a sharp decline

Many PMS products mention their strategy category in their official documents. 

Strategy-wise listings, such as those presented on platforms like PMS AIF WORLD, are also used to group PMS options under similar styles for comparison.

Step 4: Compare Performance Properly (Not Just “Best PMS Performance In India”)

Many investors search for the best PMS performance in India and select services based only on past high returns. 

However, returns depend on market conditions and risk taken. Therefore, top PMS in India should be compared using long-term results, benchmark returns, and consistency across market phases.

(A) Long-term Performance (3-year and 5-year)

Long-term performance shows whether the PMS has worked across different market conditions.

A PMS that performs steadily for five years generally indicates a disciplined approach rather than short-term luck.

(B) Benchmark Comparison

Benchmark comparison involves comparing PMS returns with indices like:

• Nifty 50
• Nifty 500
• BSE 500

If a PMS cannot outperform its benchmark over a long period, the investor may reconsider whether the higher cost and active management are justified. 

Performance reporting and return history are commonly compiled in performance listings, including those available on PMS AIF WORLD.

(C) Consistency

Good PMS products perform reasonably well across:

• bull markets,
• bear markets,
• sideways markets.

A PMS that performs well only during a single market rally may not be dependable over time.

Wrapping Up

A PMS should not be selected only because it shows the highest past returns. 

The Best PMS in India is the one that matches an investor’s risk tolerance, investment goals, time horizon, preferred strategy, and comfort with volatility.

Therefore, PMS selection should follow a step-by-step comparison method as provided here. This ensures that the investor makes decisions based on structure and suitability, rather than short-term numbers.