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The jury is out…. Portfolio Management Services (PMS) have outperformed Equity Mutual Funds (MF) by a huge margin

If you had invested 50 lacs each in the basket of Top 5 Equity Mutual Funds Vs Top 5 Portfolio Management Services over the last 1,3,5,10 Years, check out the Numbers.

Which is better – Portfolio Management Services or Mutual Funds?

Wealth Management Industry isn’t designed to be Fair. There are hundreds of products and strategies that waste time and money. One must practice caution while investing.

PMS AIF World provides analytics & content backed quality investment service. It is easy to socialize and sell, which is what most sales-driven wealth management companies do. But it is equally difficult to maintain insight and integrity which is what drives us. Our focus is Performance and we are driven by meaningful analytics.

We are a new age Wealth Management Company. With us, investors make informed investment decisions.

Here we present a simple analysis to address the most asked questions – Where should you invest – Portfolio Management Services (PMS) or Mutual Funds (MF)? And the comparison of Mutual Funds Vs Portfolio Management Services. While both are well regulated and credible structures meant to out-perform equity market indices, objective performance analysis conveys that it is the Portfolio Management Services (PMS) that have generated significantly higher alpha and so, are righty considered to be wealth-creating vehicles. Which is better – Portfolio Management Services or Mutual Funds? Detailed Score Card is Out.

Simple 3 Steps Followed

Step 1: We filtered Top 5 Mutual Funds and Top 5 PMS in different time periods of 1 Year, 3 Years, 5 Years, 10 Years from all the options available during these time periods.

Step 2: For making it simpler we removed Pure Mid & Small Cap Mutual Funds & Portfolio Management Services and only covered Multi-Cap, Large Cap, and Large & Mid Cap categories.  

Step 3: We assumed investing 50 lacs in equal weights in these Top 5 MFs & Top 5 PMS products during these time periods.

PMS and MF Return Comparison Chart

2.5 Cr invested in Top 5 Portfolio Management Services (PMS) in the last 10 years has grown to Rs. 10.22 Cr as compared to Rs 8.68 Cr in Top 5 Mutual Funds

Just to share a few names of Best Mutual Funds that have been incorporated in this analysis are also some of the popular MFs: SBI Focused, Mirae Focused, Axis BlueChip, Mirae Large Cap, IIFL Focused, Axis Multi-Cap. These have been amongst the Top 5 Equity Mutual Funds in different time periods

Similarly to share a few names of Best PMSs that have been incorporated in this analysis are also some of the popular PMSs: Motilal Oswal NTDOP, Girik Capital Multi-Cap Growth, IIFL Multi-Cap, ASK India Entrepreneur (IEP), Marcellus Consistent Compounders, Ambit Coffee CAN, Alf Accurate IOP, Stallion Asset Core. These have been amongst the Top 5 Portfolio Management Services (PMS) in different time periods.

If you see, most MFs that are appearing are those with a lesser number of companies, which industry calls focused category of funds. So it is all about focus & right concentration. And, diversification beyond a point is a strategy to reduce risk, but at a cost of returns.

PMS and MF Return Comparison Data

This was simple. The difficult task starts from here on. And, that is –

  1. How to select the potential Best 5 Portfolios for different periods of 3 to 5 years of future investments?
  2. How to keep the conviction to hold the best ones for the longer-term?

And, this is best endeavored by our Analytics & Content backed approach.

Our proprietary analysis & proprietary content helps tackle the above 2 tasks respectively. We are very selective, and analyze PMS products across 5 Ps – People, Philosophy, Performance, Portfolio, and Price with an aim to ascertain the Quality, Risk, and Consistency(QRC) attributes before suggesting the same to investors.

Holding on to the good equity investments requires high conviction in the portfolio at all points of time, else, one tends to exit early owing to the traps of emotions or impatience. With our proprietary content via fund manager videos, newsletters, articles, we keep our clients updated, and this ensures our clients always make informed decisions.

We offer responsible, long term quality investing. Our Philosophy is simple, but not easy –

Quality + High Conviction = Compounding

For any queries related to your investment needs, book an appointment with our experts.

Wish to make INFORMED INVESTMENTS for Long Term WEALTH CREATION

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Disclaimer: All Investments are subject to market risks. Please read all Scheme Information Documents (SID) /Key Information Memorandum (KIM), addendum issued from time to time, and other related documents carefully before investing. Past performance is not indicative of future returns. All this analysis has been performed for the purpose of promoting informed investing. 

All numbers are net of expenses except Satco Growth & Momentum Portfolio, which are gross. Piper Serica Leader Portfolio's data above 1 Year pertains to the advisory performance which is running under SEBI's advisory license since April 2015, and has been extended to PMS license in June 2019.

Source: Value Research for Mutual Fund data, and respective PMS Companies' Audited Factsheets for PMS Data.  More than 1 Year returns are CAGR. These are point to point returns till 30th June 2020. So, for 10 years, the period taken is 01st July 2010 to 30th June 2020. Likewise for all other periods.