With the introduction of SEBI’s new Portfolio Managers Route for Investing in Mutual Fund units (PRIM), investors can get a PMS-like way to invest in direct mutual fund units and SIFs.
Through this route, investors can get a professionally managed portfolio of mutual funds, SIFs and ETFs, with a minimum investment of ₹25 lakh.
SIFs are specialised investment funds that follow specific strategies, with a minimum investment of ₹10 lakh. This raises the question: should investors invest in SIFs directly or use the PRIM route? Here's what experts have to say.
Which route is better for SIF investment?
“Start with what each route is. An SIF is a product. PRIM is a portfolio management service. An investor who buys an SIF directly is choosing one strategy. An investor who goes through a portfolio manager under PRIM is paying someone to decide which strategies to hold, how much of each, and when to change the mix,” Sandeep Jethwani, Co-founder, Dezerv, said.
The real question, then, is whether you need that second layer of decision-making and whether you are willing to pay for it. Under PRIM, the portfolio manager invests in direct mutual fund plans too, but the investor pays a management fee of up to 1% of assets, Jethwani added.
For some investors, choosing an SIF directly may be a natural extension of how they already manage their investments. For others, paying for professional portfolio management may bring greater convenience and discipline. The right choice depends on the investor’s needs, risk appetite and level of involvement, Sanjiv Bajaj, Joint Chairman and MD at Bajaj Capital, added.
PRIM is a holistic portfolio, while an SIF is a standalone offering. Having an experienced portfolio manager select, size and integrate SIF strategies, based on the investor’s portfolio and risk profile, ensures that the exposure is structurally professionally monitored and actively rebalanced, Shobhit Mathur, Co-Founder at Ionic Wealth, mentioned.
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