Are you looking to grow your money by investing in securities beyond mutual funds? Well, look no further than Alternative Investment Funds (AIFs) and Portfolio Management Services (PMS). These high-risk instruments have recently gained immense popularity among sophisticated investors for wealth creation.

Let’s understand PMS and AIF in detail.

What are Portfolio Management Services?

PMS is a tailored investment portfolio in fixed income instruments, individual securities, equity, and structured products. It caters to the investment objectives of high-net-worth individuals with a minimum ticket size of Rs. 50 lakhs.

PMS offers professional management of your investments and can be discretionary or non-discretionary. In discretionary, the fund or PMS managers manage your portfolio by tracking the market and keeping your investment requirements in mind. Contrarily, in non-discretionary PMS, investors can make the final decisions.

In PMS, you actively monitor your personalised portfolio to track developments and maximise returns. Since experienced portfolio managers handle your investments, all you need to do is review the transactions periodically and get performance updates. Besides, fund managers receive flexibility in selecting stocks, sectoral allocation, and maintaining cash position.

Here, your portfolio is usually concentrated and your stocks are more likely to generate alpha returns in the long run.

What are Alternative Investment Funds?

AIFs are pooled investments for investing in hedge funds, venture capital, futures, and private equity. Based on their investment strategies, AIFs are classified into three categories.

Category I

These funds are invested in small businesses, start-ups, social ventures, early-stage ventures, angel funds, etc., with superior growth potential.

Category II

This category includes investments in Private Equity (PE) funds, fund of funds, and debt instruments.

Category III

This AIF aims at generating short-term returns by employing diverse and complex trading strategies. Category-III funds can include hedge funds and Private Investment in Public Equity (PIPE) Funds.