How to choose, without the usual mistakes.
A decision-grade due-diligence checklist. Nine checks that turn a glossy pitch into evidence, and quietly defuse the traps most new investors walk into.
The guardrails, in four numbers.
Choosing a PMS badly is rarely about being unintelligent. It's about not knowing where the traps are. Almost every one comes from reading a record too generously: admiring a return without the drawdown beneath it, a headline fee without the stack behind it, or a track record without checking who actually authored it. Work through the checklist below in order, and the common mistakes have nowhere left to hide.
Most mistakes come from reading a record too generously.
Choosing a PMS badly is rarely about intelligence. It's about not knowing where the traps sit. Almost every one comes from admiring a return without the drawdown beneath it, a headline fee without the stack behind it, or a track record without checking who actually authored it.
Work through the checklist below in order, and the common mistakes have nowhere left to hide.
Six checks. And the mistake each one prevents.
Run these before you speak to any manager. Each is paired with the specific error it defuses, so you can see exactly what you're protecting yourself against rather than ticking a box for its own sake. Pick a row and the mistake gets crossed out.
Inception-date luck: a flattering start date and one strong year passed off as a process.
Ask for at least five years of Time-Weighted Rate of Return (TWRR), and insist the window spans real stress: the March 2020 COVID crash and the 2022 rate-hike correction. TWRR strips out the timing and size of cash flows, so it reflects the manager's skill rather than when money happened to arrive. Prefer rolling returns against an appropriate benchmark over a single point-to-point CAGR.
Inception-date luck: a flattering start date and one strong year passed off as a process.
Ask for at least five years of Time-Weighted Rate of Return (TWRR), and insist the window spans real stress: the March 2020 COVID crash and the 2022 rate-hike correction. TWRR strips out the timing and size of cash flows, so it reflects the manager's skill rather than when money happened to arrive. Prefer rolling returns against an appropriate benchmark over a single point-to-point CAGR.
Red flags vs green flags.
Once you know what to look for, a good manager and a glossy one start to sound different in the first conversation. These are the tells.
| Red flags: slow down | Green flags: lean in |
|---|---|
| A pitch that leans on one spectacular year or a suspiciously well-chosen start date. | Five-plus years of TWRR that openly includes the 2020 crash and 2022 correction. |
| Returns shown as point-to-point CAGR only: no TWRR, no rolling returns, no drawdown. | Drawdown and recovery time volunteered alongside the return, not hidden behind it. |
| Any hint of an assured or indicated return, or pressure to commit before you've read the fees. | A clear, named lead manager with stated tenure, research bench and a succession plan. |
| A benchmark that flatters the strategy (mid-cap book measured against a large-cap index). | One all-in annual cost modelled on your ticket: fixed, performance, expenses, GST, the lot. |
| Reluctance to put the all-in fee, hurdle, high-water mark and exit terms in writing. | Honest benchmark, consistent style, and exit terms stated plainly up front. |
A high number tells you almost nothing on its own.
The drawdown beneath the return, the fees around it, the manager behind it and the cycle it was earned in: that's the story. Insist on five-plus years of TWRR that openly includes the 2020 crash and 2022 correction, with drawdown and recovery time volunteered alongside.
Compare managers on the same evidence rather than the strength of a pitch, and the right choice gets obvious.
Don't buy the return. Buy the evidence behind it.
A high number tells you almost nothing on its own. The drawdown beneath it, the fees around it, the manager behind it and the cycle it was earned in: that's the story. Compare managers on the same evidence and the right choice gets obvious.
The questions worth asking first.
Nyra puts every manager on the same evidence.
Every SEBI-registered strategy, scored on the same 0–10 basis with every answer citing its source, so you compare managers on the evidence rather than the strength of a sales pitch.
Keep reading.
Run the checklist against real managers, scored on the same evidence.
Educational content only, not investment advice. Figures and fee caps reflect general SEBI norms and can change. Verify the specifics in each manager's disclosure document and against SEBI records, and confirm suitability with a qualified adviser. Investments are subject to market risks.