Model portfolio vs mutual fund vs PMS: who owns the shares, who decides, and what each costs

The mutual fund vs direct stocks tax guide puts rupee figures on the tax side, and the note the tax you pay for someone else's trades shows how a PMS's turnover becomes your tax.

Portfolio managers register with SEBI. Regulation 23(2) of the Portfolio Managers Regulations, 2020 bars them from accepting less than ₹50 lakh in funds or securities from a client, with narrow exceptions such as accredited investors. The PMS guide covers how to read a PMS's fees and reported returns, and the note the ₹50 lakh door explains who the minimum keeps out.

Model portfolios became a defined product in January 2025. SEBI's guidelines for research analysts define a model portfolio as "a basket of securities for which a research report is issued" with recommended weightages, and require each one to:

• publish a report and factsheet with its methodology and the universe it picks from;
• be "true to label", named for its type or theme;
• state its investment horizon and, in advance, how often it will be reviewed and updated;
• state its risks; and
• disclose validated performance against an appropriate benchmark index.

The RupeeCase pages make the point. The Allcap page estimates its fee from the published rebalance record: 27 rebalances in the year to 3 Jul 2026, about 11.1 times the portfolio traded counting sales and purchases, so a 0.2% fee on traded value came to about 2.2% of the portfolio that year, before weight resets. Turnover varies year to year. Nifty 50 Equal Weight changes almost no names from one rebalance to the next, so its fee is mostly the small trades that reset weights. A momentum rule pays for its turnover; an index like rule barely trades.

Then add what each route leaves out of its headline fee. A fund's trading costs sit inside its NAV. A direct portfolio pays brokerage, STT and impact cost on every trade in your account. A PMS may charge a share of profits above a hurdle on top of a fixed fee. The fee drag calculator compounds any of these over your horizon, and the note the mutual fund cost stack lists the layers in a fund.

The timing is not. A fund's trades inside the scheme are not taxed in your hands; you pay when you redeem. In a PMS or a model portfolio, each sale is your sale, so a strategy that rebalances often realises short term gains often. The capital gains tax guide has the rules and worked examples.

• Is the method written down? For a model portfolio, SEBI's guidelines require the methodology and universe in the report. For a fund, read the scheme information document; for a PMS, the disclosure document.
• How is performance measured? Against which benchmark, over which periods, after which costs, and is any of it a back test rather than a live record?
• How often does it trade, and what does that cost? Turnover drives both fees on trades and short term tax.
• What happens when I leave? Redeeming units, transferring securities out of a PMS, or simply keeping the shares of a model portfolio.
• Who is registered with SEBI, and as what? An asset management company, a portfolio manager, a research analyst or an investment adviser each carry different duties to you.

• A mutual fund fits small amounts, SIPs of any size, a wish to never see individual trades, and strategies with high turnover where deferring tax matters.
• A PMS fits investors above ₹50 lakh who want a named manager's judgement and a fully hands off account, and accept its fee structure.
• A model portfolio fits investors who want to own the shares, see the rule, and approve each change, with enough money to hold every name in whole shares.

None of these is better in general. The choice is which trade offs you accept.

RupeeCase publishes rule based index algos and their rebalances; the shares are bought in your own demat through your own broker when you approve each rebalance, with a fee of 0.2% of the value traded, as the pricing page sets out. It is a technology platform, not a mutual fund or a PMS; research is by QC Alpha Research, whose SEBI research analyst registration is pending. Large Mid Hybrid runs a momentum rule on the Nifty LargeMidCap 250 with a 20% debt sleeve, 41 holdings rebalanced every 2 weeks: model CAGR 33.21%, deepest fall −18.27%, as of 27 Apr 2026, after model costs.