Budget 2020

What is the difference between a mutual fund scheme and Portfolio Management Service?

1. Mutual funds (MF) use the pooled accounts for the funds and securities whereas Portfolio Management Service (PMS) uses a separate bank account and demat account for each client.

2. Minimum investment amount for a mutual fund is Rs 5,000 while the same is Rs 50 lakh for PMS.

3. The market value of mutual fund holding is calculated on the basis of Net Asset Value (NAV) of the units held whereas in PMS it is the total of the market value of the securities in demat account and cash in bank account of the client.

4. Mutual funds revise their portfolio on a monthly basis through their factsheet, whereas in PMS you can see the portfolio daily through your individual demat account.

5. Mutual fund charges are capped by Sebi whereas PMS fees are not based on any guidance by Sebi.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)