The flip side is that the investment philosophy of same fund manager may not give returns in every market. Prashant Jain of HDFC was much celebrated fund manager in the 2000-2008 run but since then his performance has fallen. Just another point to keep in mind.
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@djrish, Hi Rishabh, thanks for your comments⌠would you mind elaborating what are the reasons behind your preference of PMS over MF.
My write-up on mf and PMS
It depends on person to person. cant advice you without knowing some stats about you but in general PMS is not a very good product. I will prefer mf anytime over pms. In mf, the exit load is 1% and in PMS it goes as high as 3% also there are entry load sometimes which is not in the case of mf.
In pms, your returns depend completely on the fund manager. He can buy anything of any proportion, basically meaning he can do anything from your funds and you cannot even question him for that.
His ego, greed, fear anything can destroy you. Your returns will not be linked to market but to his investment strategy and comparing that to an index is foolish.
Past performance is also very vague in pms as different joining dates can change the returns drastically. A single stock can lift the returns of a concentrated pms and vice versa but itâs not the case with mf.
So itâs on you to invest blindly on a pms(without knowing the number of stocks, market cap of stocks,quality of stocks, industry in which major portfolio belongs) or with a mf where you can check and compare past performance, check the top 10 largest holdings(which is generally 60-70% of total allocation ), know the sectors of the mf, you can even choose a sectoral mf if you like a particular sector.
Rest itâs your money so you can decide the best for it.
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MF is undoubtedly great in all those years including crash if stay invested. It has benefit of rupee cost averaging, where you get more units when market is down. And when market is up? You realize that you gain heavily more from all those crash. Compounding was/is/will be doing well for your target.
Why bothering inflexibly and risky PMS? Itâs not even a match to your style or most style. Itâs a burden with high charges and profit sharing and some regrets. My good friend also faced the same with @Hocuspocus32 experience.
We know Indian market is economically strong, and every good funds are in direction of exchanges, better than that. You donât have to go to other roads.
Iâd appreciate if you share your next decision if youâre comfortable.
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I have been doing some research of my own on MF vs PMS. I think PMS does make sense but only if it is max 10-25% of the overall portfolio. Above that, there is too much concentration risk. Other pros and cons have already been discussed above at length.
One further change from the above conversation is that the minimum amount for PMS now is 50L. Another interesting thing I found was that the expense ratio for PMS is negotiable - if you have higher amounts to invest, you can negotiate for a better expense ratio which is not the case for MF. This also means that as your exposure in the PMS goes up, you should bargain for a better expense ratio.
Hope this helps.
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If your portfolio is 50 lacs and if you go for a PMS risk is too high as your corpus is invested with one PMS.
Build corpus and diversify eventually.
Have expectation of 14% return in MF or PMS.
You can go towards more focussed funds or good fund houses .
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Dear All, Has anyone invested with Purnartha or Equirus PMS - I am contemplating both of then and would be good to hear some first hand feedback on returns. Esp. on Purnartha, as their returns on advisory are outlier when I compare it with last 1.5 years of SEBI reported PMS data.
Thanks
Hi @sanjukoli,
I looked at Moneylife too, and it looked interesting. But their subscription model does not include the archives, which seems unreasonable to me. You only get access to the material published in the last year, I think.
Big time avoid purnartha.
Returns are only because of Bajaj finance returns from returns years back.
Thanks @Akshay_Lulla.
On Purnartha website they claim to have generated 10X in less than 8 years. Some more statistics here in public domain - https://www.purnartha.com/Purnartha/performance.aspx. Apart from the one you mentioned, I read somewhere they also are long on Dmart and Tata Consumer - other winners amongst probably others.
I would be keen to understand a bit more on your comments or if this is based on personal experiences.
or anyone else who has any experience or feedback to share.
Thanks