Shobhit Mathur, Co-Founder, Ionic Wealth, and Mohit Gang, Co-Founder & CEO, Moneyfront, said the new framework could change the way investors use PMS by moving the focus beyond stock selection towards broader portfolio management and asset allocation.
Mathur pointed out that the minimum investment threshold for the new mutual fund portfolio management route has been reduced from ₹50 lakh to ₹25 lakh. This could bring more mass-affluent investors into professionally managed portfolio solutions, particularly those whose investments have grown through SIPs and compounding.
“Asset allocation is the biggest reason for people to deliver strong returns,” Mathur said.
The experts said the biggest change could be the expansion of PMS from a largely equity-focused product to a more diversified portfolio solution.
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Under the revised framework, portfolio managers can build exposure across mutual funds, ETFs, index funds and other permitted instruments. For investors with the ₹50 lakh PMS threshold, the scope expands further to include global investments, listed and unlisted investment-grade debt, REITs, InvITs and derivatives for hedging and risk management.
Mathur said this could allow PMS managers to manage portfolios across asset classes and geographies rather than concentrating only on individual stocks.
The broader investment universe could become increasingly relevant as Indian investors look beyond domestic markets. Mathur noted that Indian markets account for only a small share of global listed markets, while investors are increasingly tracking developments in global equities, fixed income, commodities and other asset classes.
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₹25 lakh route could bring more investors into professionally managed portfolios
The new mutual fund portfolio management framework, referred to in the discussion as MFPMS or the PRIM framework, could be particularly relevant for mass-affluent investors.
Under this structure, portfolio managers can build and manage a basket of direct mutual fund schemes, ETFs and SIFs for clients. The minimum ticket size is ₹25 lakh, while the fee is capped at 1% of assets under management, with a performance-linked fee also permitted.
Gang said the framework gives investors access to direct plans while allowing a professional manager to handle asset allocation, scheme selection and execution.
“This is like taking a portfolio manager’s route to investing in mutual funds,” Gang said.
The model could also increase competition among wealth managers as investors gain the ability to compare different managers based on their track records and portfolio management approach.
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Global investing and IPO access to expand for HNIs
For investors meeting the ₹50 lakh threshold, the revised framework provides a wider set of investment opportunities.
These include foreign listed equities and debt, overseas mutual funds and ETFs, index funds and foreign government securities, subject to the applicable rules and limits.
The framework also allows PMSs to invest in IPOs, including debt IPOs, according to Gang.
This could give portfolio managers more flexibility when constructing portfolios for high-net-worth and ultra-high-net-worth investors.
For the entire discussion, watch the accompanying video
