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PMSs focusses on a few selected companies and says no to the rest, whereas Mutual funds are made to follow too diversified approach because these are products meant for the masses. Though this helps mutual funds in reducing volatility to an extent, but more doesn’t always mean low risk, and in fact, exposure to more companies may increase the risk of buying less known.
AIFs combines the operational ease of a mutual fund and the flexibility of a PMS making it a perfect blend geared for generating optimum performance for a stipulated investment objective. To enhance risk-adjusted performance, these products can use complex strategies like unlisted equity investments, long-short hedging style of investments etc