Wealth Management

Post the results of the three state elections the most common topic of discussion these

The outbreak of COVID-19 is being referred to as a “once in a century event” and has heightened uncertainty for many companies which have to deal with the prospect of a significant drop in their cash flows. The longer the pandemic persists, greater the risks as leveraged businesses might find it hard to service the debt or access credit.

Make volatility help you create wealth

The long journey to major financial goals like buying a home, children’s higher education and retirement, is comparable to a long distance flight or a sea voyage. In Air travel you sometimes experience uncomfortable air pockets and choppy seas in case of sea travel. Of course, we don’t interrupt or abandon those journeys because turbulence is a part and parcel of them.

This is a regular question that I get asked at meetings with investors and mutual fund distributors. It is even more common today as markets have moved up to a record high and valuations have pushed significantly higher. This question presupposes that I have the skills to discern the risks in the market. Blessed as I am with a worrying & skeptical nature, I see risks all the time. But, the problem with risk is that the biggest and market disrupting risks are those that I cannot see. Worse they are the unknown unknowns.

Not all asset classes have been winners consistently in the investing world since different asset classes may react differently to macroeconomic events. As such, asset classes like equities, debt, gold, real estate etc., tend to perform in their respective economic cycles.

While equities may perform better during periods of high economic growth, debt may perform better during periods of decreasing interest rate scenario. Similarly, gold may be a better performer when asset classes like equity and debt seem volatile and uncertain, as gold is considered a safer investment option.

When it comes to mutual fund investing, investors can choose between actively and passively managed funds. While both aim to provide market-linked returns to the investors, these funds tend to differ on many parameters.

Mutual funds are investment products that create a portfolio of securities from the money invested by different investors. The investors can invest in mutual funds by submitting the application form physically at any official Points of Acceptance, through the website/ mobile app of the mutual fund house, or digital options provided by Registrar & Transfer Agents or any other online aggregator’s platform.

Mutual funds provide the benefit of diversification to investors by creating a basket of portfolio securities. A Fund of Funds (FoF) goes a step ahead to invest in other mutual fund schemes instead of directly investing in equity, debt securities, etc.

Taxation of Fund of Funds

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