How To Compare Schemes

Published 2026-01-20. Last updated 2026-04-17. Editorial review: Know Your PMS editorial standards. By Abhimanyu Kucheria for Know Your PMS.

Topic cluster: Evaluation & Due Diligence

Start here if you are building a shortlist or reading factsheets for the first time. These guides cover comparison frameworks, disclosure literacy, and the traps that make good marketing look like good performance.

Pillar guide: How To Compare Schemes

More in this cluster:

• How To Read Factsheet
• Common Pms Red Flags
• Benchmark Selection
• Peer Group Comparisons
• Survivorship Bias

What it means (plain English)

Comparing PMS is not ranking by one year's return. Start with mandate fit: large, mid, small, multi-cap, thematic—aligned to your risk budget and tax situation. Then align benchmarks and time windows (36–60 months minimum, including stress years).

Layer metrics: CAGR and rolling returns for growth, max drawdown and recovery for pain, Sharpe/Sortino for risk-adjusted efficiency, alpha/beta for skill vs exposure, fees for net outcome. Read portfolio concentration, turnover, and team stability.

Use Know Your PMS to normalize peers, but verify on primary factsheets. Interview managers on worst year process. Check capacity and minimum investment. For HNIs above ₹1Cr, operational matters—reporting, tax packs, customization—break ties.

Narrow to two or three finalists, then compare side-by-side on the same spreadsheet. Avoid comparing more than five simultaneously—analysis paralysis favors marketing noise.

Worked example (Indian PMS scenario)

You narrow five mid-cap PMS schemes to two finalists. Same benchmark (Nifty Midcap 150 TRI), 36-month window, net of fixed fee returns: Alpha 16.2% vs 14.8%. Max DD −28% vs −19%. Sharpe 0.85 vs 1.05. Turnover 95% vs 60%. AUM ₹480 cr vs ₹220 cr.

Scorecard weighting: 30% risk (max DD, Sortino), 30% risk-adjusted return (Sharpe, alpha), 20% process (turnover, concentration), 20% business (AUM capacity, team stability). Scheme B wins on risk and fees despite lower headline CAGR.

On ₹2 crore over 5 years, 1.4% annual net advantage compounds to ~₹14.5 lakh before tax. Document the decision in a one-page memo: metrics, fees, red flags, and why the runner-up lost. Future-you will thank present-you when the winner has a bad year.

Why it matters for PMS scheme selection

Structured comparison prevents the classic mistake: choosing last year's winner with the wrong risk, fees, and liquidity for your goals.

See the complete PMS evaluation framework

• Creates repeatable shortlist process across managers
• Balances return, risk, fees, and operations
• Reduces recency bias from last calendar year
• Aligns mandate to IPS before metrics debate
• Produces defensible documentation for family/office

How to interpret it (practical checklist)

1. Define mandate and risk budget first
2. Select 36–60 month window with stress years
3. Align benchmarks across candidates
4. Build table: CAGR, drawdown, Sharpe, fees, AUM
5. Review holdings overlap and concentration
6. Interview on worst period and process
7. Check capacity, minimum, and reporting quality
8. Document decision rationale before signing

Explore related metrics · Compare PMS schemes · Cagr

Common pitfalls (how this gets misused)

Read our methodology for assumptions and limitations.

• Starting with returns before mandate definition
• Comparing schemes with different inception dates unfairly
• Ignoring net vs gross return differences
• Overweighting manager storytelling vs data
• Skipping reference calls with long-term clients
• Choosing on brand without fee and liquidity review

Related metrics to review together

Use this guide alongside these metrics to avoid one-number decision-making:

Browse all metrics

• Cagr
• Max Drawdown
• Sharpe
• Volatility

Related guides

• How To Read Factsheet
• Correlation To Benchmark
• Return Dispersion Across Schemes
• Liquidity Risk In Small Cap Schemes
• PMS Sharpe Vs Sortino

See also

• Peer group comparisons
• How to read a factsheet
• Benchmark selection
• Common PMS red flags

FAQs

How many PMS should I compare at once?

Screen 10–20 on Know Your PMS, deep-dive 4–6, finalize 2–3. More than that invites superficial metric shopping. Depth beats breadth for ₹50L+ decisions.

Should I compare PMS to mutual funds?

Yes for cost and mandate context—many core equity needs are met by MFs. Compare PMS when you need customization, concentration, or specific manager access worth the fee premium.

What if two schemes look identical on metrics?

Differentiate on process, team, capacity, tax approach, and operational fit. Tie-break with client references and your conviction from manager meetings—not another decimal of Sharpe.

Next: How to compare PMS schemes · Compare schemes · All guides