The Perfect Blend in Investing
Dear Investors,
Direct Equity Investment is not for the investors juggling
busy schedules and lacking in-depth market knowledge, navigating the investment
landscape can be overwhelming.
Enter professionally managed funds like Mutual Funds (MF), Portfolio Management Services (PMS), and Alternate Investment Funds (AIF), offering a streamlined approach to diversified investing.
Challenges for Investors:
Identifying the right funds amidst the multitude of options can be daunting (there are 2500 Mutual Fund Schemes, 324 PMS schemes, 1088 schemes in AIF in India), requiring extensive research across various asset classes. Seeking guidance from experienced investment consultants like 'GRADED FINANCIAL SERVICES', whose founders come with collective experience of 60 years while operating in the space of Stock Broking, Wealth Management, Banking, Insurance, Forex and Investment Banking, can ease this burden.
1)
Mutual Fund (MF):
MFs pool resources from investors to access a
range of investment opportunities, from equities to bonds and more.
Benefits include risk diversification,
affordability, liquidity, low expense ratios, and tax efficiency.
The minimum amount required to
invest in mutual funds is Rs. 100/- for the Lumpsum and Rs. 500/- through
SIP (Systematic Investment Plan).
2)
Portfolio Management Services (PMS):
PMS offers
tailored investment solutions for High-Net-Worth Individuals (HNIs), providing
access to diverse asset classes viz. mix of stocks, fixed income, commodities,
real estate, other structured products, and cash
Unlike mutual
funds, PMS offers flexibility in exposure and fee structures based on
performance.
The minimum amount
required to invest in PMS is Rs.50 Lac.
3)
Alternate Investment Fund (AIF):
It is a privately pooled investment vehicle that invests in alternative asset classes such as - private equity, venture capital, SMEs, debt funds, Private Investment in Public Equity Fund (PIPE), hedge funds, real estate, commodities, and derivatives.
AIFs may offer
higher returns than traditional investments due to their exposure to a broader
range of assets and investment strategies. However, this higher return also
comes with higher risk.
The minimum
investment amount for investors is Rs. 1 crore.
(AIF) Taxation:
Tax
implications vary across AIF categories, with Category I and II enjoying
pass-through status (taxed at the hands of investors), while in case of Category
III the income earned will be taxable in the hands of the fund.
Suggestions:
Personalized investment strategies based on financial goals and investment capacity, combining MFs, PMS, and AIFs for optimal diversification and risk management.
For Example:
1) Invest less than Rs.1 Crore: in highly rated (evaluated based on 7 – vital parameters of selection) MFs, diversified in equal amount amongst Top Rated Large, Mid, Small, Multicap, Hybrid, and Index Funds.
2) To Invest Rs. 1 Crore: Rs. 50 Lac in MFs (as explained in above point number 1) and Rs. 50 Lac in Highly rated PMS.
3) To Invest Rs. 2 Crore: Rs. 50 Lac in MFs (as explained in above point number 1), Rs. 50 Lac in highly rated PMS, and Rs. 1 Crore in hghly rated AIF.
4) To invest over Rs. 2 Crore: Follow above sequence from point 1 to 3.
Conclusion:
The Blend of MF, PMS, AIF would offer wonderful opportunities
to the investors to take exposures, vide diversification across asset classes, market
caps, executed under different proven strategies of investing by an experienced
Fund Managers.
However, sound subject knowledge, capability to do risk
assessment, and make right choices of funds /schemes by the investors would
make all the difference, as the funds come with varying degree of complexities,
risk and corpus requirement.
Committed to your financial well-being.
