The two, however, are very different. MFs cater to a far wider audience and provide much less customisation while PMS caters to a specific investment demographic and offers superior customisation. Vardan Pandhare helps you to decode both options as an investment avenue for 2023
Since the corona virus epidemic began in March 2020, India has seen a tremendous expansion in retail participation in financial investments like shares, mutual funds and PMS. The pandemic, along with digitisation and more lenient restrictions, contributed to an increase in household financial assets from 12 per cent of GDP in 2019–2020 to 15.7 percent in 2020–21. One asset class that has seen significant growth in investor activity is equities. At the end of November 2022, there were approximately 10.5 crore demat accounts in India.
Since the pandemic began, this has increased by more than twice. Mutual funds collected almost ₹1.25 lakh crore in 2021–2022 from 5.5 crore accounts in just their SIP books. Earlier, investors used to favour mutual funds as their preferred vehicle for stock investing, but recently portfolio management services, or PMS, have generated a lot of attention. Approximately ₹24 lakh crore of assets are managed by PMS compared to about ₹38 lakh crore by mutual funds. This doesn’t give a comprehensive picture though as ₹18 lakh crore of the ₹24 lakh crore invested are by EPFOs.
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