Mutual Funds – Pooling & Portfolio Management

Introduction

We discussed Mutual Funds as a product. Here we look at the Service aspect: Asset Management.

1. The Service Provider: AMC

Asset Management Company (AMC) is the firm that manages the pool.

• HDFC AMC, SBI Mutual Fund, Nippon India.
• Establishment: They earn a Management Fee (Expense Ratio) for their service.

2. Portfolio Management Service (PMS)

• Mutual Fund: One size fits all. Everyone in the scheme gets same portfolio.
• PMS: Customized portfolio for HNIs.
• Min Ticket Size: ₹50 Lakhs (SEBI Rule).
• Service: The Fund Manager creates a unique portfolio for the wealthy client.

3. Systematic Investment Plan (SIP)

A service to automate savings.

• Bank deducts ₹5000 automatically every month.
• Benefit: Rupee Cost Averaging (Navigates market volatility).

Summary

• AMC: The company managing money.
• PMS: For HNIs (>50L).
• MF: For Retail Investors.
• Service: Professional expertise in stock selection.

Quiz Time! 🎯

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