InvestorQ : How has the correction in the stock market impacted the PMS (portfolio management service companies?
prachi Patwardhan made post

How has the correction in the stock market impacted the PMS (portfolio management service companies?

Answer
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5 months ago


While mutual funds have been hit by the market correction, it is the PMS plans that have taken it on their chin. This has really impacted the performance of PMS funds in March 2020. An analysis of over 147 PMS plans reveals drawdown ranging from 3% to 41% during this period. In some cases, the 35-40% negative returns in a year can be attributed to major concentration risk in the scheme. The situation is a lot worse in the case of large cap and multi cap plans, as compared to mid cap plans. PMS plans are generally more alpha specific as compared to mutual funds that focus on diversification. This likely to further dent the attractiveness of PMS plans in the coming months, especially among the HNIs.