Customised for HNIs
The mutual fund (MF) space has grown significantly in the past two decades. However, being a mass product, MFs follow the law of averages when it comes to risk and returns. This works for retail investors but fails to meet the risk and return objectives of high net worth individuals (HNIs).
This is where portfolio management services (PMS) and alternative investment funds (AIFs) come into the picture. “MFs are standardised schemes with a lot of investment restrictions. PMS and AIF offer more flexibility,” says Rahul Jain, Head, Edelweiss Wealth Management. The recent rigid classification of MFs by Sebi has made it worse.
“PMS managers construct a focused, client-centric portfolio with fewer high-conviction stocks having healthy earnings visibility, quality balance sheets and business leadership,” says Rajesh Cheruvu, CIO, Validus Wealth.
PMS Returns
Most PMS plans get their returns from equity markets, they cannot remain completely insulated from significant developments in the market. Concentration of stocks generates superior returns in normal
