Month: May 2025

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Why Are Global Fund Solutions Significant in a Diversified Portfolio?

May 16, 2025

In today’s interconnected world, investors are no longer solely tied to domestic markets. Whether experienced, institutional, or part of a family office, diversification is vital for every investor. Global investment solutions serve as a powerful tool for any robust investment strategy. This blog will explore the importance of global investment funds in India for diversification and identify who should consider investing in them. 

Global Fund Solutions—An Overview

Global fund solutions encompass strategies, structures, and services that facilitate investments across geographies, asset classes, and sectors. These solutions enable investors to access international markets, hedge against country-specific risks, and seize unique growth opportunities globally. The primary objective of diversification is risk mitigation. By spreading investments across various assets, regions, and industries, investors can lessen the impact of a single underperforming investment on their overall portfolio. 

Why Do Global Fund Investments Matter in Diversification?

  1. Portfolio Diversification: Global funds invest across many countries, allowing investors to diversify their portfolios geographically. Economic slowdowns, political instability, or currency fluctuations in one country can adversely affect domestic investments. Investing globally disperses exposure, helping to balance out regional risks.
  2. Exposure to the Global Economy: Many emerging markets provide faster growth than developed countries. Global funds can give investors exposure to these markets, something that cannot be achieved through domestic investments.
  3. Reduced Volatility from the Domestic Market: Investors’ reliance on the domestic market diminishes when they invest in global funds. In times of domestic market volatility, global funds can potentially yield returns.
  4. Sector & Innovation Exposure: Global funds grant access to specific sectors or industries, taking advantage of the growth potential in international markets.
  5. Long-term Investment Strategy: Global diversification is generally regarded as a long-term investment strategy. By investing in global funds, investors can move closer to their financial objectives.

Looking to invest in global fund investments? Click here to know the factors before investing in them. 

Who Should Consider Global Fund Solutions?- 

  • Institutional investors seeking multi-region allocations.
  • High-net-worth individuals aiming to grow their wealth internationally. 
  • Indian investors looking for offshore growth.
  • Family offices targeting global diversification. 

Final Thoughts

Global fund solutions empower investors to diversify by opening up a wider and more balanced investment universe. However, similar to any investment, it’s essential to align global fund solutions with financial goals, risk tolerance, investment horizon, and the regulatory environment. Seeking professional advice from an expert is recommended.

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What mistakes should you avoid when investing in AIFs in India?

AIFs (Alternative Investment Funds) are designed for experienced and accredited stakeholders such as HNIs or sophisticated investors. AIF funds are regulated by the Securities Exchange Board of India (SEBI), but their guidelines and framework differ from mutual funds or traditional investments. AIFs have longer maturity periods and come with certain risk factors.

What are these, and what should investors do? Let’s discover this in this blog. 

Factors to avoid while investing in Alternative Investment Funds in India: 

  1. Not Doing Proper Research: Investing in an Alternative Investment Fund (AIF) without thorough research can increase risks. It’s essential to verify facts and review past performance. Investors should always analyze the fund manager’s background, performance history, and investment strategy.  
  2. Choosing an Investment Timeframe: AIFs typically come with long lock-in periods, often ranging from 5 to 10 years. If an investor needs access to funds earlier, this can cause financial stress. Individuals must ensure their investment goals align with the AIF’s investment horizon.  
  3. Ignoring the Risks: Many investors are attracted to the potential high returns of AIFs but overlook the associated risks. These funds often employ complex strategies that can increase volatility. Market movements, operational challenges, and regulatory shifts can impact performance. Understanding these risks beforehand helps investors make informed decisions and avoid unexpected losses. 
  4. Not Understanding the Fees: AIFs often have a range of fees, including management, performance, setup, and operational charges. These can significantly affect an investor’s overall returns. It is crucial to seek a transparent fee breakdown, compare fees across different funds, and assess whether the expected returns justify the costs involved. 
  5. Putting Too Much in One Basket: Investing a large portion of capital in a single AIF or one strategy can expose the investor to high risk. If the chosen fund doesn’t perform well, investors may face losses. An investor should aim to diversify across multiple AIF categories, asset classes, and strategies to reduce risk and enhance overall portfolio stability. 
  6. Forgetting About Rules and Laws: AIF investments come with legal, tax, and regulatory responsibilities. Ignoring these can lead to compliance issues and potential penalties. Investors must ensure that the fund adheres to all relevant regulations and maintains proper documentation. They should consult expert fund managers and tax professionals to understand the regulatory landscape effectively. 
  7. No Plan to Exit: Many investors enter AIFs without considering how or when they will exit. Some funds have strict exit rules, limited liquidity, or fees for early withdrawal. It’s important to understand the exit options specific to each fund. Planning exit strategies helps investors stay prepared for market changes or personal financial needs.

What are the key differences between PMS and AIFs? Let’s give them a read. Click here.  

Final Thoughts

AIFs in India require extensive research and monitoring. Investors must remember the aforementioned points to avoid mistakes while investing. An AIF investment strategy cannot be successful without professional guidance, regular portfolio reviews, and up-to-date knowledge of market trends.

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Is the National Pension System becoming the best annuity plan in India? Learn why? 

A retirement plan should provide peace of mind in your golden years. Individuals seek to receive a pension after retirement; in this regard, the National Pension System (NPS) is considered one of the best annuity plans in India. Initially introduced for government employees, the NPS was later opened to every Indian citizen. Subscribers can withdraw up to 60% of their retirement corpus, while the remaining 40% must be used to purchase annuities for a regular pension. So, what are the benefits of the best annuity scheme in India? We will explore this in the blog.

NPS – A Brief Introduction 

The National Pension System is a voluntary retirement savings plan designed to help individuals financially safeguard their futures. It is a market-linked scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). The primary purpose of the NPS is to create a corpus that generates income after retirement. Any Indian citizen aged between 18 and 70 can open an NPS account. Additionally, it offers tax deductions under Sections 80(C) and 80(1B) of the Income Tax Act.

NPS Annuity – Explained 

Upon retirement, NPS subscribers can withdraw 60% of the total corpus, while the remaining 40% must be used to purchase an annuity plan from a Registered Annuity Service Provider (ASP), which is empanelled by the PFRDA and deemed reliable for reinvesting your money. An annuity also pays a fixed amount to the subscriber and their spouse upon the subscriber’s death.

Why is NPS the Best Annuity Plan? 

The annuity policy of the NPS protects a subscriber’s hard-earned money and provides a steady income during old age. Here are a few key features of the NPS annuity plan:

  1. Flexibility to choose: The minimum amount to buy annuities is 40% of the retirement corpus; however, NPS subscribers can opt for a higher amount if they prefer a lower lump sum withdrawal and a significantly higher regular pension.
  2. Withdrawal before the age of 60: Withdrawals can only occur after turning 60 to access 60% of the accumulated corpus. If you wish to exit before 60, only 20% can be withdrawn as a lump sum, while the remaining 80% will be reinvested into an annuity.
  3. Annuity options: Multiple annuity plans are available in India, including options for lifetime payouts to the subscriber, lifetime payouts with continued income to a spouse after the subscriber’s death, and several customizable variations.

Click here to learn how NPS is an attractive option for retirement planning. 

Annuity Policy in NPS – Benefits  

  • Reinvestment Benefit: A fixed 40% of your retirement corpus is reinvested to provide lifelong annuity payments, potentially increasing in value over time. 
  • Financial Safety: Annuities ensure a steady income in retirement and protection against financial turmoil.
  • No Investment Cap: NPS annuity schemes have no upper investment limit, distinguishing them from other pension tools. 
  • Partial Withdrawal Option: Subscribers can withdraw up to 25% after three years for specific needs such as marriage, home purchases, or medical expenses.

Final Thoughts 

The NPS in India can be regarded as the best annuity plan due to its numerous benefits. Features like the absence of an upper investment cap, flexibility in choosing options, and continued income for a spouse are crucial factors that make the National Pension System a favourable choice for individuals. 

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5 Reasons why NPS is the best retirement plan in India? 

May 14, 2025

Retirement is inevitable for every employee. They start looking for better retirement plans to have a financially secure future. Here, NPS can play a vital role in giving them a piece of mind during their golden years. So, if you are wondering, why choose NPS as your pension plan in India? Then, read this blog till the end.  

National Pension System —An Introduction

The National Pension System, also known as the National Pension Scheme in India, was introduced by the Government of India in 2004. Earlier, it was only meant for public sector employees, but later it was available for every citizen of India, except for people working in the armed forces. It comes with various features; let’s have a look at them first.

 National Pension System—Features

  • Voluntary: NPS is a voluntary investment plan. It allows you to choose how much you would want to invest as per your retirement plans.
  • Diversification: NPS invests in a range of asset classes, such as equity, corporate bonds, government securities, and AIFs.
  • PFRDA Regulated: The Pension Fund Regulatory and Development Authority regulates the NPS, ensuring transparency of your investments and potential returns.
  • Tax Benefits: NPS comes with certain tax benefits under Section 80 (C) and 80 CCD (1B) of up to ₹1.5 lakhs and ₹50,000, respectively. A subscriber can get both of the benefits.

NPS Scheme – Why Choose it for Retirement Planning?

 NPS offers several benefits that make it an ideal choice for retirement savings. Here are the top reasons to include NPS in your retirement planning:

  1. Tax Benefits: The most attractive reason to invest in NPS is its tax benefits. As per Section 80C of the Income Tax Act, you are eligible to claim deductions of up to ₹1.5 lakhs on your investment in the Tier-1 account. There is an additional deduction of ₹50,000 under Section 80CCD. All these tax benefits make your taxable income lower, and you pay less tax in the long term.
  2. Control Over Investments: NPS offers you the flexibility to choose how your contributions are invested. You have the flexibility to invest across asset classes of equities, government securities, corporate bonds, and alternative funds of investment. You can structure your portfolio as per your risk appetite and investment objectives and thus be able to maximise returns while managing risks.
  3. Regulated: The NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), a government body that ensures the safety and growth of your investments. This makes NPS a trustworthy option among other retirement plans.
  4. Low-Cost Plan: NPS has low management charges, which are between 0.03% to 0.09%. Lower charges mean that a larger portion of your contribution is invested towards your retirement corpus. Eventually, helping you create potential wealth
  5. Flexible and Portable: NPS provides great flexibility when it comes to withdrawals. You can withdraw partially in case of emergencies like medical bills, education fees, or buying a house. Also, the portability option enables you to operate your NPS account from anywhere in India, so your retirement savings are always available whenever and wherever you require them.

 Are you looking to save taxes while investing in NPS? How much can you save? Click here to learn. 

Final Thoughts

NPS is one of the best retirement plans in India, as it not only offers tax benefits but also enables you to build a retirement corpus over time, providing a regular pension after retirement. Additionally, it is advisable to consult a professional financial expert before embarking on your journey. 

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