This Or That

The pitch reads well. The math underneath does not. The PMS fee sits on top of the mutual fund expense ratio, not in place of it. All-in: 1.1 to 2%. A direct MF portfolio does the same job at 0.5 to 1%. Tax pass-through is a feature of mutual funds, not the PMS wrapper. The moment the PMS rebalances between schemes, the demat books a redemption and tax follows. Profit sharing without a hurdle rate is not alignment. The manager keeps 20% of the upside and bears none of the downside. Investors pay carry for beating zero. A HNI with 50 lakh can buy 4 to 6 direct funds, pay an RIA a flat fee, and keep most of what the wrapper would have taken. The structure pays the provider better. Not the investor.

The MF route to international exposure is becoming very unreliable. No sane person can plan his investments with such flip flop. It's about time SEBI scrapped this cap and let markets function the way they are supposed - as free markets. If the rupee is weak, that's because of policy.