MFs vs PMS: Let corpus size and need for flexibility guide choice

In a pooled structure, your fate is tied to the collective behaviour of all investors. In a non-pooled one, your portfolio stands on its own

A few days ago I was at a friend’s wedding. As it happens sometimes in Indian weddings, the actual turnout far exceeded expectations. Some of the popular dishes ran out early. The chef, under pressure, had to quickly prepare a few alternatives using whatever ingredients were available, items that were easier and faster to prepare in large quantities. 

That moment reminded me of mutual funds (MFs) versus portfolio management services (PMS). In a pooled vehicle like a mutual fund, the fund manager — much like the chef — is sometimes forced to act based on the crowd’s behaviour. 

When investors