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Why I prefer MFs over PMS products. @MFSahiHai @amfiindia #MutualFundsSahiHai
1) Lower expense ratios - Direct funds would cost 1-1.5% while PMS cost ~3.25% (including fees, expenses and taxes) for fixed fee options.
1) Lower expense ratios - Direct funds would cost 1-1.5% while PMS cost ~3.25% (including fees, expenses and taxes) for fixed fee options.
2) Tax Advantages - When you hold MFs, you pay capital gains when you redeem your units. In PMS, you are liable to pay capital gains as and when the fund manager sells individual stocks in your account. Same goes for Dividend payments.
3) Ease of Investment and Liquidity - There are no min contribution requirements with MFs. Partially redeeming funds is a lot easier and lesser paperwork than PMS
4) Performance - Consistent outperformance of PMS schemes over MFs, which is a key pitch point to clients, has not been credibly demonstrated over the past 5 year cycle.
5) Didn't expect this thread to explode. Here is why I think we are seeing greater visibility of PMS/AIF schemes in the recent years. https://twitter.com/SrVarun/status/1307673406406443008
