SEBI proposes MF-only PMS with ₹25 lakh entry: Expert explains how it differs from traditional PMS

SEBI proposes Mutual Fund-only PMS (MF-PMS) framework with a minimum investment of ₹25 lakh, bridging the gap between self-managed mutual fund investing and traditional PMS.

The framework is for portfolio managers who exclusively manage client investments in direct plans of mutual fund schemes, including ETFs and Specialized Investment Funds (SIFs).

The proposal targets investors with investable surpluses of ₹25 lakh to ₹50 lakh who do not qualify for traditional PMS (minimum ₹50 lakh), estimated at 1.5–2 crore Indian citizens.

The MF-PMS addresses challenges from the proliferation of mutual fund schemes (roughly 2,000 schemes vs. 500 investable stocks), making fund selection and portfolio monitoring difficult.