Make Money: Motilal Oswal Asset Management Company has launched two new schemes. His name is Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive and Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative.
Fixed deposits of the bank are not a good source of income. Including the effect of inflation, fixed deposits (and other interest related assets) have always been a bad bet. In fact, equity mutual funds have always been the best option for securing regular income and especially for the days following retirement. In such a situation, if you are thinking of investing money, then two new funds have come in the market. Let’s know about them…
Two new schemes launched
Motilal Oswal Asset Management Company has launched two new schemes. His name is Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive and Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative. Both these Funds of Funds (FOF) are also available on the company’s digital partner Grow App.
Indian stock markets set for a ‘slow grind’: Motilal Oswal Financial
Motilal Oswal Asset Management says that there are thousands of investment options available in the market today. We feel that this is the only fund sufficient for investors.
The stock market is at its peak. Date yields are at lower levels. Gold has proved to be the best performing asset in 2020. In such an environment, we believe that the best way to invest is to invest in different assets to get good returns with low risk.
Where will investors invest
These schemes are 100% passive multi asset FOF. They will invest in equity, international equity, fixed income and commodities. This will give investors the opportunity to invest in different types of assets according to their risk capacity or investment goals.
How much will you get returns
Experts say that any mutual fund SIP can expect at least 12% return on investments made in 20 years. Once the market stabilizes, only the return should be reviewed. The investor should decide on the basis of the review whether to continue with the current plan or switch.
Now know what are these FOF mutual funds
Funds of funds are schemes of mutual fund which invests in other schemes. These mutual fund schemes can be fund house own or any other fund house.
According to the fund house, these funds will follow the philosophy of strategic rebalancing in investment. This will eliminate the risk of market timing. There is no fund manager risk or credit risk involved.
Now know about active fund and passive fund
Experts say that it is easy to differentiate between active funds and passive funds. Fund managers manage active funds. Active funds require rebalancing, while passive funds function as indexes. Changes in shares require rebalancing. ETFs or index funds are examples of passive funds.
Motilal Oswal Mutual Fund launches new scheme, know the main things
Investments are made in active funds according to market fluctuations. In this, the manager will be able to invest in equity and fixed income from the scheme. At the same time, there is no opportunity for a fixed income option in a passive fund.
If you want to understand the difference between these two funds on the basis of the returns, then returns on the passive fund are similar to the index. Active funds can provide better returns than the benchmark. There should be risk potential for investment. There is a risk in both categories of funds. Therefore, it is only right to choose a passive fund for investment in the long term.
Investments in active funds attract a charge of 2.25–2.50 per cent while investments in passive funds attract a charge of 0.50–0.75 per cent.
How much will be the tax
As per the current rules, both the FOFs will be taxed like debt instruments. Long-term investors holding these funds will be able to claim indexation benefits. This will reduce their tax liability considerably.
