What is the difference between portfolio management and mutual funds?- Kundan Kishore (2024)

FAQs

What is the difference between mutual funds and portfolio management? ›

Portfolio Management services generally belong to high net worth individuals whereas mutual funds serve to a wide range of investors. Mutual funds are tightly regulated by SEBI whereas Portfolio Management services are not that transparent as compared to mutual funds. Investment Planning is a must for every individual.

MFs offer a wider variety of stocks to choose from and are suitable for those with a smaller corpus and low tax compliance. In contrast, PMS portfolios are tailored to your taste and goals and are suitable for those with a larger corpus that demands customization.

A manager who manages assets for a large money management institution is commonly referred to as a portfolio manager, while someone who manages smaller fund assets is typically called a fund manager.

Portfolio management is the selection, prioritisation and control of an organisation's programmes and projects, in line with its strategic objectives and capacity to deliver. The goal is to balance the implementation of change initiatives and the maintenance of business-as-usual, while optimising return on investment.

Portfolio Management vs Investment Banking – Outlook

Asset management is all about managing clients' investments. And investment banking is all about raising the capital for clients. So, the basic difference between these two is asset management, and clients already have the money you need to manage.

Senior portfolio managers often report directly to a chief investment officer (CIO), which makes portfolio management a potential career path to an executive position in an organization, whether as a CIO or a similar executive function with higher-level responsibility for the investment process.

Specialized portfolio management is a product that is more suited to the high net worth investor who has a larger corpus. Of course, you need to take a final call after weighing the pros and cons to see if portfolio management is really adding value to you or not.

As a mutual fund investor, you get the benefit of having a professional manager reviewing the portfolio on an ongoing basis. Professional portfolio managers and analysts have the expertise and technology resources needed to research companies and analyze market information before making investment decisions.

The four distinct types of portfolio management are active, passive, discretionary and non-discretionary management.

A mutual fund is a pool of money managed by a professional Fund Manager. It is a trust that collects money from a number of investors who share a common investment objective and invests the same in equities, bonds, money market instruments and/or other securities.

Do mutual funds have portfolio managers? ›

Portfolio managers develop and implement investment strategies and manage the day-to-day trading of a portfolio. These professionals may be responsible for managing an individual investor's assets or those of an institutional fund, such as a mutual fund.

Managed accounts can be timed to reduce tax burden; investors in mutual funds lack a choice when it comes to capital gain payout.

Managed accounts and mutual funds both represent actively managed portfolios or pools of money that invest over a variety of assets—or asset classes. Technically, a mutual fund is a type of managed account. The fund company will hire a money manager to look after investments in the fund's portfolio.

Portfolio managers diversify and customize solutions keeping in mind the risk vs returns aspect of the investor. It also helps investors in risk management. They can control the amount of risk they are willing to take while creating their portfolio. This helps investors in ensuring stable returns in the long run.