MPEG 2 to hevc or mp4

Hevc is supposed to be same quality as mp4 but with much reduced file size.

I have some mpeg 2 streams which I have converted to both hevc and mp4, but the quality degrades considerably on hevc even though files size is alarmost half. On the other hand mp4 is much better quality with only small reduction in file size.

I am using permute from setapp to convert.

Am I missing anything ?

I don’t know about Permute (it touts ease of use and speed and says “Permute will look amazing. Taking advantage of the modern technologies” - which doesn’t really say anything about quality), but Handbrake, which is free, is considered to offer the best quality conversions.