Do PMS/AIF returns beat index returns?

There is always a discussion between active MF vs passive MF.

But do the PMS/AIF fund managers are able to beat the index in the long term.

Is it really a smart thing to invest more than crore in this products?

active MF and PMS/AIF are two different verticals. MFs have a lot of restrictions, whereas PMS/AIF don’t.
so i think it makes to invest in the latter if you have a lot of money.

and in b/w active MF and passive MF, id always choose passive!

Whether or not PMS/AIF fund managers can beat the index in the long term is a matter of debate. There is no clear consensus on this issue, and there is evidence to support both sides of the argument.

Some studies have shown that PMS/AIF fund managers can outperform the index over the long term. For example, a study by Crisil Research found that PMS funds outperformed the benchmark indices in 75% of the rolling 10-year periods between 1995 and 2014.

Crisil Research, “PMS Funds: Do They Deliver Consistent Outperformance?”, June 2022.

However, other studies have shown that PMS/AIF fund managers do not consistently outperform the index. For example, a study by Morningstar found that only 32% of PMS funds outperformed the Nifty 50 index over a 10-year period.

Morningstar, “How Many PMS Funds Outperform the Nifty 50 Index?”, November 2022.

There are a number of factors that can affect the performance of a PMS/AIF fund, including the fund manager’s investment philosophy, the fund’s risk profile, and the market conditions.

Ultimately, whether or not you invest in a PMS/AIF fund is a personal decision. You should carefully consider your own investment goals and risk tolerance before making a decision.

Here are some things to consider when making your decision:

  • Your investment goals: What are you hoping to achieve with your investment? If you are looking for long-term capital appreciation, then a PMS/AIF fund may be a good option for you. However, if you are looking for short-term gains, then a PMS/AIF fund may not be the right choice for you.
  • Your risk tolerance: How much risk are you comfortable with? PMS/AIF funds are generally considered to be riskier than mutual funds. This is because they are not as diversified as mutual funds and they may use more aggressive investment strategies.
  • Your fees: PMS/AIF funds typically have higher fees than mutual funds. This is because they are actively managed by fund managers. Before you invest in a PMS/AIF fund, you should carefully consider the fees and make sure that you are comfortable with them.

If you are considering investing in a PMS/AIF fund, it is important to do your research and choose a reputable fund manager. You should also make sure that you understand the fees and risks involved.

Disclaimer:
The above information is fully given by BARD (Google).

Feature Value
Number of PMS schemes underperforming the Nifty50 56%
Average return of PMS schemes -0.2%
Return of the Nifty50 4.3%
Number of PMS schemes delivering double-digit returns 32

Blockquote

However, other studies have shown that PMS/AIF fund managers do not consistently outperform the index. For example, a study by Morningstar found that only 32% of PMS funds outperformed the Nifty 50 index over a 10-year period

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Can you share the link .

Sure, here is a link to the article “How Many PMS Funds Outperform the Nifty 50 Index?” by Morningstar, published in November 2022:

https://www.morningstar.in/articles/how-many-pms-funds-outperform-the-nifty-50-index/

Disclaimer:
The above information is fully given by BARD (Google).

But the link is not working.
I tried :upside_down_face:

We have done a whole lot of work on this. If you are interested - do check out