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Differences Between Investing in a PMS and Mutual Funds

Have a look at the following points to get a better grip of these concepts and understand their differences more clearly. Visit https://www.investmentz.com/portfolio-management-services-pms to know more!<br><br><br>

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Differences Between Investing in a PMS and Mutual Funds

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  1. Differences Between Investing in PMS & Mutual Funds

  2. Introduction • Mutual funds (MF) and portfolio management services (PMS) are two very popular vehicles for investors. They help in allocating money in different classes and, thereby, create a portfolio of stocks or fixed income securities. • Have a look at the following points to get a better grip of these concepts and understand their differences more clearly:

  3. 1. Regulations • In comparison to portfolio management services, mutual funds are strictly regulated by the Securities and Exchange Board of India (SEBI). • Hence, they provide more transparency when it comes to their policy terms and conditions.

  4. 2. Minimum Investment • As PMS is a high-end product, it appeals to high-net-worth individuals or HNIs more than it does to middle-income group individuals. • Contrary to this, with mutual funds, you can start investing from as low as ₹500. Hence, MFs have a much wider audience when it comes to investing opportunities.

  5. 3. Fees • If you choose to invest in a PMS investment scheme, you must be prepared to fulfill certain charges for equity portfolio management. • There is no such arrangement in mutual funds, except for a minimal expense ratio and exit load.

  6. 4. Investment Options • Since mutual funds are very diverse, people with different risk profiles can opt for different equity funds ranging from high risk to neutral to low-risk ones. • In PMS investment plans, the portfolios are very concentrated. This means it does not consist of more than 20-30 stocks at a time. This also makes it a riskier venture.

  7. 5. Returns • Investing in mutual funds means that an investor will be supplied by a consistent rate of returns, usually on the higher side, over a stipulated period of time. • When it comes to equity portfolio management, returns are absolutely superlative in nature.

  8. 6. Taxes • When it comes to taxes, both MFs and PMS attract certain charges. • Since MFs are a financial asset, paying taxes on the capital gains becomes mandatory. • With PMS, depending upon the transactions made by your fund manager, you will be subjected to pay for both short-term and long-term capital gains.

  9. Visit www.investmentz.com to know more!

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