Portfolio Management interview preparation

Questions

100

Traced to a firm

40

Firms

24

Updated

September 2026

Asked at

All firmsBLBlackRock4Vanguard4WMWellington Management4Amundi3ACAQR Capital Management3Neuberger Berman3SCSchroders3Man Group2MSCI2Northern Trust2AllianceBernstein1Apollo Global Management1Blackstone1BMBNY Mellon1Carlyle Group1Fidelity Investments1Goldman Sachs1Invesco1Millennium Management1MSMorgan Stanley1NUNuveen1PIMCO1SSState Street1TPTPG1

Topic

All topicsPortfolio theory5Factor models8Asset allocation11Rebalancing3Portfolio construction7Benchmarks and tracking error5Performance measurement8Risk management6Fixed income and LDI5Currency and global3Implementation and costs5Active versus passive6India markets7Brainteasers5Career and fit16

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseMarket viewFitBrainteaser

1. 075What is a PMS, and how does it differ from a mutual fund and an AIF?India marketsCorephone / first roundIndian asset managementIndian wealth management

   Say this

   A PMS runs a separate account in the client's own name with a 50 lakh rupee minimum, so the client owns the securities directly and is taxed on each transaction. A mutual fund is a pooled vehicle taxed at the investor's exit. An AIF is a pooled private fund with a one crore minimum and far wider freedom on strategy and leverage.

   Then walk it

   1. PMS: discretionary or non-discretionary, minimum 50 lakh, securities held in the client's own demat account. Because there is no pooling, every trade the manager makes creates a taxable event for that client, and performance is reported net of the fees that client actually paid.
   2. Mutual fund: pooled, heavily regulated on concentration, liquidity and disclosure, daily NAV, minimum investment of a few hundred rupees, and no tax at the fund level, so gains are only taxed when the investor redeems. That deferral is a real, quantifiable advantage over a PMS for a high-turnover strategy.
   3. AIF: three categories. Category I for venture and infrastructure, Category II for private equity and private credit, which is the largest, and Category III for hedge-fund-like strategies including long-short and leverage. Minimum one crore, taxation depends on category and structure, and Category III has been the fastest growing.
   4. The construction freedom runs the other way to the regulation. A mutual fund has tight single-issuer and single-stock limits. A PMS can run 15 concentrated positions. A Category III AIF can be long-short and levered. So concentration and leverage rise as the investor's ticket size rises.
   5. Fee models differ too: mutual funds have a capped total expense ratio and no performance fee, PMS commonly charges a fixed fee plus a performance fee over a hurdle with a catch-up, and AIFs use private-fund style fees with carry.
   6. The practical comparison I would make to a client is after-tax and after-fee. A PMS with a 20 percent performance fee and full annual taxation of realised gains needs to beat a mutual fund by a significant margin before the client is better off, and the sales pitch rarely presents it that way.

   Where candidates lose it

   Describing PMS as just 'a mutual fund for rich people'. The two structural differences that matter are direct ownership, which changes the tax treatment completely, and the freedom to concentrate. And be ready with the after-tax comparison, because that is the question a real client asks and most candidates have never done the arithmetic.

   Expect next

   • Why does the tax treatment favour a mutual fund for high turnover?
   • What can a Category III AIF do that a mutual fund cannot?
   • Which would you recommend to a client with five crore?

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.