By Satya Santosh – Certified Investment & Stock Market Expert
For most small or first-time investors, Mutual Funds are an excellent starting point due to their affordability, diversification, and regulatory safety. However, when investors have higher capital, clear financial goals, and the right risk appetite, Portfolio Management Services (PMS) and direct stock investments under expert advisory can offer superior long-term returns.
🔍 What’s Changing? Recent Regulatory Impact
Recently, SEBI has restricted mutual funds from investing in pre-IPO shares and often imposes strict asset allocation rules. While this protects retail investors, it also limits mutual fund flexibility and growth potential.
In contrast:
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PMS and direct stock portfolios offer greater flexibility in asset selection
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Fund managers in PMS can take high-conviction bets and allocate to opportunities not accessible to mutual funds
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More freedom = potentially higher returns, when managed properly under risk-controlled strategies
📉 2025 Trend: Mutual Funds Underperforming
Recent performance data shows:
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A large number of mutual funds have underperformed their benchmarks
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Some are even generating negative returns
This underperformance is largely due to regulatory limitations and overcrowded strategies across the mutual fund industry.
🚀 Why PMS & Direct Stocks Can Perform Better
| Feature | Mutual Funds | PMS / Direct Stocks |
|---|---|---|
| Flexibility in Stock Selection | Limited | High |
| Ability to Invest in Pre-IPO / Special Situations | Restricted | Allowed |
| Customization Based on Goals | Low | Very High |
| Potential for Outperformance | Moderate | High (with expert management) |
Key Point: PMS portfolios are actively managed by highly experienced fund managers who have greater freedom to capitalize on market opportunities.
⚠️ The Other Side: Why Some Lose Money in Direct Stocks
Many retail investors lose money in stocks due to:
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Overtrading / Intraday speculation
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Lack of discipline
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Emotional decision making
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No proper risk management framework
✅ This is why professional advisory and structured PMS strategies are recommended for serious investors.
🎯 Final Advice: Choose Based on Your Profile – Not Others’ Strategy
Investment success is not about picking the most popular product—it’s about picking the right product for your risk profile, financial goals, budget, and return expectations.
Never copy someone else’s investment path. What works for one investor may not work for another.
✅ Conclusion
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Mutual Funds: Best for regular investors with small to moderate budgets.
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PMS & Direct Stocks: Ideal for investors with higher capital and long-term vision, who want personalized strategies and higher return potential.
“Our goal is not to promote or oppose any financial product. The right investment is the one that aligns with your personal financial goals, risk appetite, and timeline.”
— Satya Santosh