Mutual Fund is an investment trust for investors with a common investment objective and invests funds in securities, which complement that objective. The rewards/risks are proportionately shared by all the investors in the Mutual Fund. PMS, on the other hand, is a personalized investment service provider that takes into account unique needs of investors. It is not possible to service all investors through a mutual fund due to the uniqueness/diversity of investment objectives. Thus, a PMS seeks to address investors’ requirements through an individual investment goal assessment exercise and portfolio building. The rewards/risks from the portfolio are borne solely by the investor for whom the portfolio is being managed.
An investor in a PMS can expect better handholding from his/her/its portfolio manager than he has been accustomed to in investing either on his/her/its own or from through his/her/its broker or in a mutual fund. A PMS investor can also expect to occasionally interact with the portfolio manager to discuss any concerns that he might have. The Portfolio Manager will handle all administrative matters, including operating a bank account and dealing with settlement and depository transactions.