Over 75% of PMF funds outperform mutual funds in 10-year period: Report

The study also assessed PMS and mutual funds were assessed across market cap categories like large, mid, small, large-mid, flexi cap, multicap and thematic.

Over 75 percent of funds under the Portfolio Management Services (PMS), which are opted for by high networth individuals (HNIs), have outperformed mutual funds in a 10-year time frame, according to a report.

The report, released by PMS Bazaar, compared the performance of 335 PMS funds with 388 regular mutual funds, spread across varied time frames such as 1, 3, 5 and 10 years.

The study revealed that PMS investment approaches outperformed their benchmarks by an impressive 70 percent on average across all time frames and categories, while mutual funds managed a 48 percent.

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In the 5-year period, 59 percent of PMS investment approaches outperformed their benchmarks compared to just 46 percent of mutual funds, the report said.

"This trend continued in the 3-year and 10-year periods, with PMS consistently delivering superior benchmark-beating returns," PMS Bazaar added.

M-cap wise performance

The study also assessed PMS and mutual funds across market capitalisation categories like large, mid, small, large-mid, flexi cap, multicap and thematic.

During the 3-year window, barring the thematic category, PMS outperformed benchmark and mutual funds across all the categories. The PMS smallcap approaches thrived, exceeding the benchmark
by a whopping 91 percent compared to mutual funds' 41 percent, as per the report.

Midcap PMS also shone, surpassing the benchmark by 84 percent compared to just 17 percent of mutual funds. Similar dominance was seen in the
large, large-mid, multi and flexi cap categories in the 3-year time frame.

However, the tables turned in the thematic category where mutual funds outperformed benchmark and PMS investment approaches by 59 percent, as per the study.

In the 5-year timeframe, PMS investment approaches were dominating in 5 of the 7 categories including large, mid, small, flexi and multi-cap categories. But in the large-mid and thematic categories, mutual funds had the upper hand.

The highlight, stated PMS Bazaar, "was that in the 10 years all the PMS investment approaches have outperformed mutual funds and benchmarks".