Alternative Investment Funds (AIFs) are specialized investment vehicles that pool funds from investors to invest in assets beyond traditional stocks and bonds. Managed by SEBI-registered fund managers, AIFs provide access to opportunities such as private equity, venture capital, real estate funds, hedge funds, and structured products that are typically not available in regular mutual funds.
Every investor has unique goals, risk tolerance, and investment preferences. This quick comparison helps you understand the key differences so you can make an informed decision with confidence.
Feature | Alternative Investment Funds (AIFs) | Portfolio Management Services (PMS) | Mutual Funds |
---|---|---|---|
Minimum Investment | ₹1 Crore (as per SEBI norms) | ₹50 Lakhs | As low as ₹500/month (via SIP) |
Investment Type | Private equity, venture capital, real estate, hedge funds, alternative assets | Direct ownership of stocks and bonds | Pooled investments in stocks, bonds, etc. |
Customization | Limited (as per chosen fund strategy) | High–Tailored portfolios | Low–Standardized schemes |
Risk Level | High (private markets, complex strategies) | Moderate to High | Low to Moderate |
Liquidity | Low (lock-in periods are common) | Moderate (no fixed lock-in) | High (except ELSS, close-ended funds) |
Taxation | Taxed as per the underlying asset class | Taxed as direct equity or debt investments | Mutual fund taxation (Equity/Debt rules) |
Transparency | Periodic reporting | Full stock-level visibility | Daily NAV, periodic portfolio disclosure |
Ideal For | HNIs seeking high growth and diversification | HNIs want personalized wealth management | Retail investors seeking affordability and diversification |