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PORTFOLIO MANAGEMENT VS. MUTUAL FUNDS: The Basic Differences

Let's check out the general difference between Portfolio management and Mutual Funds. Visit https://www.investmentz.com/ to know more!

VeritaMonteiro
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PORTFOLIO MANAGEMENT VS. MUTUAL FUNDS: The Basic Differences

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  1. PORTFOLIO MANAGEMENT VS. MUTUAL FUNDS: The Basic Differences

  2. WHAT IS PORTFOLIO MANAGEMENT? • A portfolio is a systematic documentation of financial assets – including stocks, bonds, exchange traded funds etc. – held by a person. • Portfolio management services involve diversification of one’s portfolio by means of a customized allocation of securities for each individual investor. • These services are mostly offered by fund managers, who prepare the investment portfolios based on every investor’s short-term and long-term investment goals/objectives and risk tolerance levels. • Based on these criteria, they provide the best ‘investment mix’ that is most suited to the investor’s needs.

  3. WHAT ARE MUTUAL FUNDS? • A mutual funds investment is an investment plan that pools money from investors and uses it to invest in a wide range of securities. • Mutual funds investment plans may include investments in one or more types of securities such as stocks, bonds, currencies, money market instruments etc. • Every investor owns a share or ‘unit’ of each security in a mutual funds investment. • Mutual funds investments can be classified into different types basis the securities they invest in. Some of these types include: • Equity mutual funds • Bond funds • Balanced funds • Index funds • International funds

  4. DIFFERENCES BETWEEN PMS AND MUTUAL FUNDS Portfolio Management Mutual Funds Investment The investor owns all the securities in his/her portfolio. However, the power of attorney lies with the fund manager. Tailor-made investment plans customized to suit individual needs. Comparatively less transparent as they are not tightly regulated by a governing body. More suited to High Net-worth Individuals (HNIs) owing to high entry load and ticket size. PMS funds often have higher lock-in periods and hence lower liquidity The investor owns units of each security included in the investment plan. Entirely prepared by the company or bank which offers the investment scheme. More transparent as they are strictly regulated by SEBI guidelines. Caters to a wider range of investors, as the minimum investment amount is just Rs. 500/-. Typically higher liquidity rate with minimal or no exit rates charged.

  5. HOW TO INVEST WITH PORTFOLIO MANAGEMENT Steps involved in investing with Portfolio Management Services:

  6. HOW TO INVEST IN MUTUAL FUNDS

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

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