A side-by-side matrix of four regulated investment vehicles across ticket size, regulation, taxation, liquidity, short positions, disclosure and cost. Each vehicle is built differently; this page describes those differences and does not rank the vehicles.
The SIF column is highlighted because this site covers SIFs; the highlight is a reading aid, not a preference. Rows show the general rules for each vehicle; individual schemes and portfolios set their own terms in their offer documents.
| Dimension | Mutual Fund | SIF | PMS | AIF Cat-III |
|---|---|---|---|---|
| Minimum ticket | ₹100–₹500 | ₹10 lakh (₹1L for accredited) |
₹50 lakh | ₹1 crore |
| Regulatory wrapper | SEBI MF Regulations 1996 | SEBI MF Regs (Chapter VI-C) |
SEBI PMS Regulations 2020 | SEBI AIF Regulations 2012 |
| Pooled vs Separate | Pooled | Pooled | Separate demat per investor | Pooled |
| Long-short / unhedged | Hedging only | Yes — ≤25% NAV | Yes (no statutory cap) | Yes (no cap; leverage shorts allowed) |
| Liquidity | Daily (most) | Daily / weekly / monthly / interval | T+2 to T+5 typical | Lock-in 1–3 yrs typical |
| Disclosure | Monthly portfolio | Bi-monthly portfolio + ISID | Monthly + on-demand | Quarterly |
| Tax — Equity (≥65%) | LTCG 12.5% (>1y) STCG 20% |
LTCG 12.5% (>1y) STCG 20% |
Capital gains as holdings are sold: STCG 20%, LTCG 12.5% |
Slab rate (Cat-III, fund-level) |
| Tax — Hybrid (<65% eq) | LTCG 12.5% (>2y) | LTCG 12.5% (>2y) STCG slab |
Per holding sold (equity and debt rules apply separately) | Slab rate |
| Tax — Debt | Slab rate | Slab rate | Interest at slab; gains per holding sold | Slab rate |
| Fund-level tax | Nil — Sec 10(23D) | Nil — Sec 10(23D) | N/A (pass-through) | Cat-III: at fund level |
| TER cap | ~2.25% (asset slab) | ~2.25% | 1–2.5% mgmt + 10–20% perf | 1.5–2.5% + 15–20% perf |
| Performance fee | No | Optional (rare) | Yes | Yes |
The same facts as the matrix, read vehicle by vehicle. Whether any of them is appropriate for a particular investor depends on that investor's circumstances and is assessed one to one, not on this page.
Minimum investment of ₹100–₹500, with SIPs available. Regulated under the SEBI Mutual Funds Regulations 1996. Most schemes offer daily liquidity and disclose portfolios monthly. Derivatives are used for hedging only. No tax at the fund level (Section 10(23D)); tax is charged in the investor's hands.
Minimum investment of ₹10 lakh (₹1 lakh for accredited investors). Regulated under Chapter VI-C of the SEBI Mutual Funds Regulations. Can take unhedged short positions of up to 25% of NAV. Redemption may be daily, weekly, monthly or at intervals, depending on the strategy. Bi-monthly portfolio disclosure, with an ISID for each strategy. TER cap of about 2.25%; performance fees are optional and rare. Taxed on the same basis as mutual funds.
Minimum investment of ₹50 lakh. Regulated under the SEBI PMS Regulations 2020. Each investor has a separate demat account, so securities are held in the investor's own name and the portfolio can be customised. No statutory cap on short positions. Liquidity typically T+2 to T+5; disclosure monthly and on demand. Fees typically combine a management fee and a performance fee. Tax treatment is shown in the matrix above.
Minimum investment of ₹1 crore. Regulated under the SEBI AIF Regulations 2012. Pooled, with no statutory cap on short positions. Lock-ins of 1–3 years are typical, portfolios are disclosed quarterly, and fees typically combine a management fee and a performance fee. Category III AIFs are taxed at the fund level.
Mutual funds and SIFs pay no tax at the fund level (Section 10(23D)); tax is charged in the investor's hands, and the treatment depends on the asset mix and the holding period. A PMS is pass-through: the investor holds the securities directly. A Category III AIF is taxed at the fund level. The tax rows in the matrix above summarise each case.
Mutual funds and SIFs are subject to a TER cap (about 2.25%, depending on asset size), and SIF performance fees, though permitted, are rarely used. PMS and AIF Category III typically charge a management fee plus a performance fee; the TER and performance-fee rows in the matrix show typical ranges. The actual fees for any scheme or portfolio are set out in its offer documents or client agreement.
The SIF framework sets limits that PMS and AIF Category III do not have. These are features of each structure, not a judgement on which is better.
SIF caps unhedged shorts at 25% of NAV. PMS and AIF Cat-III have no such statutory cap.
SIF is pooled: investors buy units in a strategy alongside other investors. PMS uses a separate demat account with individual stocks in the investor's name, which allows customisation such as exclusion lists and individual tax-loss harvesting.
As of September 2026, 33 live SIF strategies exist across 17 AMCs — still far fewer than the hundreds of PMS and AIF strategies. Choice keeps widening as more houses (HDFC, DSP, Nippon, Axis) file with SEBI.