PRIM vs DIY mutual funds: Is professional portfolio management worth the extra cost?

With fees capped at 1 percent a year, PRIM offers investors a professionally managed mutual fund portfolio from Rs 25 lakh. But for investors who can manage their own funds, is the added convenience worth paying for?

Investors with Rs 25 lakh to invest in mutual funds have two broad choices. They can build and manage their own portfolio or pay for professional help through a Portfolio Management Services (PMS)-like mutual fund offering called Portfolio Management Services for Investment in Mutual Funds (PRIM).

Approved by the Securities and Exchange Board of India (SEBI) board on September 24, 2026, PRIM is designed to bridge the gap between do-it-yourself (DIY) mutual fund investing and full-fledged portfolio management services. It allows investors to access a professionally managed portfolio of mutual fund schemes through a single platform, with a SEBI-registered portfolio manager responsible for fund selection, asset allocation, rebalancing and execution.

The key question is whether this professional oversight justifies the additional cost. PRIM’s fixed management fee is capped at 1 percent a year, but investors must also consider any performance-linked fees and the expenses charged by the underlying mutual funds.

For investors who prefer a hands-off approach, the service could offer convenience and greater discipline. Those comfortable choosing a few low-cost index funds and rebalancing them periodically may find that managing their own portfolio remains the more economical option.

What is PRIM and how does it work?

PRIM is a professionally managed mutual fund portfolio that brings multiple schemes together under one management arrangement. Instead of selecting individual mutual funds, tracking their performance and deciding when to rebalance, investors delegate these responsibilities to a SEBI-registered portfolio manager.

The minimum investment is Rs 25 lakh. The manager selects and manages direct-plan mutual fund schemes for the investor, monitors the portfolio as a whole and handles execution.

The idea is to move beyond simply holding several funds. A portfolio needs to work as a coordinated combination of investments, with each fund serving a defined purpose. Without a clear allocation strategy, investors may accumulate overlapping schemes, take unintended risks or delay necessary changes.

Shobhit Mathur, Co-Founder at Ionic Wealth said, “PRIM aims to address two common problems. First, it seeks to ensure that the portfolio is constructed as a coherent investment strategy rather than a collection of unrelated mutual funds. Second, it delegates execution and rebalancing decisions to a professional, reducing the chances of investors postponing action because of time constraints, limited expertise or emotional biases.”

DIY investing does not necessarily mean buying and selling funds frequently. An investor can build a diversified portfolio using a small number of low-cost index funds and follow a predetermined allocation, reviewing it periodically. Such an approach can be relatively simple and inexpensive.

PRIM, on the other hand, is meant for investors who would rather delegate portfolio construction and ongoing management. The value lies not merely in fund selection but also in maintaining the intended allocation and implementing decisions in a timely manner.

Can PRIM portfolios invest in specialised investment funds?

PRIM could also create room for specialised investment funds (SIFs), debt funds and hybrid funds where these products offer a distinct role in the overall portfolio.

However, SIF allocations face a practical constraint. The minimum investment requirement is Rs 10 lakh per investor per asset management company (AMC). As a result, a Rs 25 lakh PRIM portfolio may be able to use SIFs from only one or two fund houses, depending on the allocation and the applicable investment requirements. This can limit how widely a relatively small portfolio can spread its SIF exposure across different AMCs.

Mathur said, “PRIM can bridge DIY fund investing and full PMS. Early money will likely come from existing MF investors with scattered holdings; fresh money follows as track records build. The 1 percent cap pushes managers toward low-cost funds, using SIFs, debt and hybrid funds where they add something distinct. Constraint: SIFs need Rs 10 lakh per investor per AMC, so a Rs 25 lakh PRIM portfolio can use SIFs from only one or two fund houses,”

Mathur’s assessment points to a potential early audience for PRIM: investors who already hold multiple mutual fund schemes but want a professional to bring those investments into a more coordinated portfolio. As managers build track records, the offering could also attract investors who are new to professionally managed mutual fund portfolios.

Is PRIM better than managing mutual funds yourself?

PRIM may be worth considering for investors who have sufficient capital but lack the time, confidence or inclination to manage their portfolios. It can also help investors who struggle to rebalance investments during volatile markets or who tend to make emotional decisions when markets rise or fall.

Adhil Shetty, CEO, BankBazaar, said, “PRIM can be useful for investors who want professional oversight of their portfolio and help with maintaining discipline through different market cycles. Its role is to support fund selection, asset allocation and periodic rebalancing. Investors should assess their own level of involvement, investment knowledge, financial goals and comfort with managing these decisions before deciding whether a professionally managed approach is suitable for them.”

DIY investing may be more suitable for investors who understand asset allocation, can choose appropriate funds and are willing to follow a disciplined investment plan. Someone investing for long-term goals through a handful of diversified index funds may not need to pay an additional management fee if they can manage the portfolio effectively themselves.

The decision should also account for the investor’s financial goals, investment horizon, risk tolerance and existing holdings. Professional management is not automatically better simply because it costs more, just as DIY investing is not automatically better simply because it is cheaper.

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