PMS vs Mutual Fund 
                     PMS 
vs 
Mutual Fund
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Portfolio Management Services
PMS offers the utmost flexibility and customisation of investment strategies to 
generate optimal returns. Here, expert portfolio managers lead the investment 
process depending on the type of service an investor chooses.
PMS Investment
Discretionary Advisory PMS Non-
UPnMdeSr these services, a discretionary 
manager controls the Under these services, PMS
ultimate investment a portfolio manager Here, a portfolio manager 
decisions, timings, and can only advise an advises the investor, but 
executes the trading. investor. However, the investor has the final 
The investor has no the investor makes say regarding the 
significant role as he/she the choices, decides decisions. However, the 
has given complete the timing, and also manager does the trading, 
authority to the portfolio executes the trading. not the investor.
manager.
PMS Investment: Benefits
They can get a portfolio customised as 
per their risk appetite.
Investors can frame a portfolio with the 
benefit of discretion.
PMS investment offers utmost 
transparency in portfolio management, 
performance, and reporting.
It offers substantial diversification across 
securities like shares/stocks, fixed-
income instruments, cash and cash 
equivalents, derivatives, etc.
Mutual Funds
Mutual funds are an investment vehicle that pools funds from varied investors 
and invests that compiled capital in securities like equity, debt, gold, etc. Like 
PMS, mutual funds are professionally managed by experts, known as Fund 
Managers.
Mutual Funds
Hybrid Funds Debt Funds Equity Funds
This type of MFs invests 
in two or more types of These mutual funds Invests a minimum of 65% 
securities, including invest most of their of its assets in equity and 
equity, debt, and money assets (65%) in debt equity-related 
market instruments, gold and marketable instruments. The 
and overseas securities. securities. remaining 0% – 35% can 
be invested in debt or 
money market securities.
Mutual Fund Investment: Benefits
Mutual Fund investment guarantees 
professional management of funds.
ELSS comes with tax benefits.
It helps achieve a diversified portfolio 
but is not customised per an investor’s 
objectives or aptitude. 
Systematic Investment Plan (SIP) 
enables investors to invest a fixed 
amount in an MF scheme at preset 
intervals (daily, weekly, monthly, bi-
annually, and annually.)
Parameters PMS Mutual Funds 
Investment
Regulatory Regulated by SEBI Regulated by SEBI and 
Aspects AMFI
Transparency Periodic disclosures of Mutual funds 
data/information – information such as 
transactions, costs – is portfolio disclosures, 
available performance data, can 
be tracked daily
Ownership Comes with direct Comes with shared 
ownership ownership
Minimum Rs. 50 lakhs Rs. 500 
Investment 
amount
Model Portfolio Offers customised Does not offer large 
portfolio management sum-investment options
with large-amount 
investment options
Parameters PMS Mutual Funds 
Investment
Flexibility Can be invested with no One can only gain 
restriction exposure to asset 
categories according to 
the scheme’s objective
Cost Includes management Fees are fixed in terms 
fees, performance fees, of percentage.
entry/exit loads, and 
other charges
Investor’s Asset Holds complete units of Holds units of MFs. 
Holding stocks, debt Hence, investors 
instruments, or other essentially own 
securities fractional units of all the 
involved securities
Accountability Portfolio managers are Fund managers are not 
accountable to their responsible to their 
clients clients
Bottom Line
Expert money managers guide both PMS investment and 
mutual funds. However, PMS investment is more customised 
with investment strategies informed by an investor’s risk 
appetite and financial objectives. Mutual funds are more 
regulated and can be invested with a minimum entry amount. 
Investors must consider factors like market conditions, 
purpose, risk appetite, tax benefits, etc., before investing in 
PMS or mutual funds.
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