When the broad market has done reasonably well, what value-addition can PMS providers really add?
That’s a classic debate. The question is whether you should buy active management of funds or whether you are better off buying the index. If you purely go by the track record across markets, then there is empirical evidence that probably in 2 out of 3 cases, indices have done well, if not better than the active managers. But it also means that for the rest, active managers would have done better than indices over materially long periods. While you can always put money in an index, you need to realise that a pure index approach would necessarily mean under-performance. That is because you cannot exactly get the actual index performance and it would invariably be a tad lower. Also, index trackers would give you index performance, which can be positive as well as negative. However with active managers, you would expect absolute, positive returns, albeit over a stretch of time. Markets are still high. Is it the right time to invest in equities or even in PMS? There would be ups and downs
