Key takeaways
- No PMS is best in general: the right one depends on what the rest of your portfolio already holds.
- APMI publishes standardised, time-weighted returns for PMS strategies — the only like-for-like source.
- Most “top PMS” lists rank on a single recent period, which is the weakest possible evidence of skill.
- Judge risk alongside return: the worst drawdown, the recovery time, and how concentrated the book is.
- Compare post-tax outcomes, since turnover in a PMS is taxed in your hands every year.
Why there is no single best PMS
A PMS is not a product with a fixed specification, like a fixed deposit. It is a strategy run by a team, and its value to you depends on what you already own. A small-cap strategy that topped the tables last year is a poor choice for someone whose portfolio is already small-cap heavy, however good the manager.
Two investors with the same amount of money can rationally choose different strategies, because they differ in what else they hold, how long they can leave the money alone, and how much of a fall they can live through without selling.
Where the official numbers are
SEBI requires portfolio managers to report performance on a time-weighted rate of return (TWRR) basis, and to compare it with a benchmark assigned to the strategy’s category. APMI — the Association of Portfolio Managers in India — publishes this data, which makes it the one place where strategies can be compared on the same basis.
- TWRR strips out the effect of when money went in and out, so managers are compared on their decisions, not on client cash flows.
- Benchmarks are set per category, so an equity strategy is measured against an equity index rather than a flattering alternative.
- A portfolio manager’s own Disclosure Document carries its performance, fees and any disciplinary history.
Why “top 10 PMS” lists mislead
- One period, chosen after the fact. A list of last year’s best performers is a list of whichever style happened to suit last year’s market.
- Survivorship. Strategies that closed or were merged quietly leave the tables, flattering what remains.
- No risk adjustment. A strategy that gained 40% and fell 35% along the way sits above one that gained 25% smoothly, though most investors could not have held the first.
- No tax. Rankings are pre-tax, while your outcome is post-tax, and turnover differs enormously between strategies.
- No fit. A ranking cannot know what you already own.
A fairer way to compare
- Define the job first. What is this allocation for, and what must it not duplicate?
- Shortlist within one category. Compare large-cap with large-cap, not with small-cap.
- Use rolling returns over three and five years rather than point-to-point figures that depend on a start date.
- Check the full cycle. How did it behave in the last real correction?
- Read the risk numbers. Maximum drawdown, time to recover, number of holdings, weight of the top ten, sector concentration.
- Model the fees across a range of realistic returns — see fees explained.
- Estimate the tax drag from portfolio turnover.
- Judge the team. How long they have run this strategy, whether the process is written down, and whether they invest their own money in it.
The full version of this process is our 10-point due diligence checklist, and the mechanics of investing once you have chosen are on our invest in a PMS page.
Red flags when someone names “the best”
- Assured, guaranteed or “expected” returns of any kind.
- Performance shown without a benchmark, a period, or a TWRR basis.
- Pressure to decide before a “closing date” — PMS strategies do not close.
- Reluctance to put the full fee schedule, including the distributor’s commission, in writing.
- A recommendation made before anyone asked what you already own.
Our investor awareness page explains how to verify a manager’s registration and how to raise a grievance.
Frequently asked questions
Which is the best PMS in India?
There is no single best PMS. The right strategy depends on what the rest of your portfolio holds, your horizon and the drawdown you can live with. Compare within a category, on time-weighted returns against the correct benchmark, across full market cycles.
Where can I see official PMS performance data?
APMI, the Association of Portfolio Managers in India, publishes time-weighted returns for PMS strategies against category benchmarks. Each portfolio manager’s Disclosure Document also carries its performance and disciplinary history.
Are “top 10 PMS” rankings reliable?
Rarely. They usually rank a single recent period, ignore risk and tax, and cannot account for what you already own. They are a starting point for questions, not an answer.
How many years of track record should I look for?
Enough to include at least one significant market fall — usually five years or more, run by the same team. A record built by a manager who has since left says little about the strategy today.
Should I pick the PMS with the highest returns?
Not on that basis alone. Check how much risk produced those returns, how the strategy behaved in falling markets, what the fees and turnover cost you, and whether it duplicates what you already hold.
