Portfolio Management System or PMS is on the rise where they will onboard clients who have more than 50 Lakhs to invest and thus they give their guidance in investing quality stocks. Now the thing is PMS gets a fee just like the Mutual Funds but they provides little extra than the normal Mutual Funds.
PC: Pixabay.com
I am seeing people moving towards PMS more because the alpha can help them to earn more in the longer run. Not all PMS services are good but still the good ones helps their client to get more returns. I am seeing people who have good knowledge about stock market or have made money is actually moving towards creating their own PMS. Like there are a lot of youtubers who have stock market knowledge is leaning towards having their own PMS.
The smaller version of PMS is the smallcase. The smallcase also helps you to invest in certain variety of stocks by asking a small fees and also helps you to rebalance them when needed. This is actually helpful for people who don't have knowledge of the market or time to spend in the market.
For example, for me most of my investment money goes towards mutual fund itself, but there are guys who wants little more Alpha, they go towards smallcase and then there are people who have more money like above 50 lakhs as well wants to get that Alpha they go towards PMS. And thus the hierarchy happens like this.
But that doesn't mean that PMS always gives that alpha or it can beat the market. Very fee people can actually beat the index and thus if you are lucky you can beat it. Everyone can beat the index in the bull run but the main returns we will see in the bear market. So in my opinion whatever you choose, try to see if you can beat the index otherwise just invest in plain simple Index Fund.
