What is the difference between a mutual fund and portfolio management scheme?
In mutual funds investments of different investors are pooled to form common investible corpus and gain and loss to all investors are same for all investors during a given period of time.
In portfolio mngmnt schmes the investments of particular investor remains identifiable to him,gain and loss of each investor would b different frm each other.
Portfolio Management Schemes (PMS) are claimed to be exclusive and tailor-made whereas mutual funds are ready-made. A PMS has a high entry barrier such as minimum investment of ten lakh or more whereas MFs take amounts as less as Rs.1000. Since PMS are private the performance is not in public domain. Overall an investor is better off with a mutual fund rather then a PMS unless his needs / the scheme are very unique.
