Pondering Over The Mains: AIF vs PMS – What’s The Difference
Are you planning to invest but looking for something beyond mutual funds? If yes, then this blog on AIF vs PMS is a one-stop destination for you to begin. Here our team of AIF & PMS experts will help you in detail about different investment options including AIF and PMS and answer your query what is the difference between AIF and PMS (PMS vs AIF). Wait! Don’t get confused between the two. Here we will help you familiarize yourself with these terms and let you know the difference between the two.
What Is PMS?
PMS is a customized investment portfolio in fixed income instruments, inequity security, and structured products. The objective of PMS is to generate superior returns. The service of PMS is provided by professional fund managers.
Portfolio Management System can be of two types:
1. Discretionary PMS
Fund managers are in power and take decisions on behalf of an investor.
2. Non-Discretionary PMS
In non-discretionary PMS, the final call is in the hands of investors. The fund manager is only entitled to give advice
Benefits of PMS:
- You get active portfolio monitoring to cater to maximum returns.
- A personalized portfolio to achieve your investment goals.
- PMS comes with a professional management system that gives personalized attention to all your PMS activities.
- Conveniently get periodic reviews on transactions and performance.
- PMS is straightforward and effectively managed without any hassle.
What Is AIF?
AIF stands for Alternative Investment Funds, a pooled investment vehicle investing in private equity, hedge funds, and real estate. AIF usually involves Higher Minimum Investment and risks with a probability of higher returns.
There are three categories to invest in AIF:
Category 1
Investment in startups or social ventures comes in this category. These are socially viable and economical.
Category 2
All the Private Equity Funds fall under this category.
Category 3Hedge funds, close-ended funds that are complex, fall under this category
- AIF can be easily customized according to the wishes and needs of investors.
- AIF can raise money from an investor, whether Indian, foreign, or NRI.
- AIF generates enough accumulated funds that are enough for achieving investment objectives.
Comparison Between AIF & PMS: AIF vs PMS Which one is for you?
| Basis of Comparison | PMS | AIF |
|---|---|---|
| Pooling of funds | No pooling of funds. Separate Demat accounts are created | Pooling of funds is a must |
| Minimum investment amount | Fifty Lakh Rupees ( 50 Lakh ) | One crore ( 1 crore ) |
| Minimum Corpus | No corpus amount | Ten crores |
| Lock-in Period | No lock-in period | Definite lock-in period |
| Categories | Discretionary and non-discretionary | Category I, II, III |
| Fees | Non-refundable fees of one lakh | Non-refundable fees of one lakh |
| Tenure | No defined tenure | Minimum of three years |
| Segregation Of funds | The facility of separate Demat account for segregation | No such segregation is required |
| Number of Investors | No specific number of investors | Maximum 1000 investors |
| Type of Funds | Discretionary and non-discretionary | Category I, II, III |
| Manager’s Contribution | No typical manager’s contribution | Different manager’s contributions for different categories of funds. |
Now you are all set to plan your next investment. So, why think more? Getting started is the most important step, but you are not alone because AIF and PMS Experts are with you. Reach out to us and we will help you get the best out of AIF and PMS.
Key Takeaway
AIF & PMS, both investment models, involve a considerable risk with a possibility of higher returns. AIF gives you the flexibility to invest in different derivatives, while PMS helps manage and monitor your portfolio. For maximum returns in both the investment tools, it is essential to have a brilliant management team. For brilliant advice and opportunities, contact us at AIF & PMS Experts India Pvt. Ltd