New Delhi, Feb. 23 -- Portfolio management schemes (PMS) are intended to outperform the market and the investment vehicle for the public at large-mutual funds. But in the past five years, PMS have, as a set, trailed mutual funds in beating market benchmarks. PMS are offered by registered investment firms and mutual funds, with a minimum investment limit of Rs.50 lakh. Since they allow for greater customisation, flexibility and dynamism, they offer the possibility of higher returns. However, an analysis of their regulatory filings shows this hasn't been the case in five years to December 2024.

There was a time when PMS matched mutual funds on assets under management (AUMs). In March 2014, mutual fund AUMs exceeded those of PMS by only 7%....