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Market Intelligence › Basic Terminologies
The differences in ownership, minimum size, tax and transparency
Published by The Retail Trader · JUL 24, 2026 · AIF, PE & Alternates
In all three, someone manages your money, but the legal structure of each is different. That structure decides whose name the shares are in and who is taxed.
In a mutual fund you hold units, not shares. The portfolio belongs to the fund, and your share is in the form of units.
In a PMS the shares come into your own demat. You are the direct owner, and the manager merely trades on your behalf.
In an AIF you contribute to a fund, and it is a separate pooled entity, with its own structure and its own tax treatment.
These differences show up in day to day experience:
• The minimum ticket size is smallest in a mutual fund and largest in an AIF.
• In a PMS every transaction is in your name, so the tax too falls on you on every trade.
• In a mutual fund tax is charged on redemption, not on the trades inside.
• The level of transparency and regulation is most standardised in a mutual fund.
A large minimum ticket is not a sign of a better product. For most people the question is not which structure is more premium — the question is whether its charges and lock-in are right for their goal.
This article is for educational purposes only — it is not a buy or sell recommendation, it makes no claim of guaranteed returns, and it is not advisory. Rules, rates and mechanics are changed from time to time by the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.