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Global Fund Investments: A Chance to Write Your Growth Story

July 12, 2023

If you are planning a trip to Italy, what would be your itinerary? You would look for the perfect time to visit as per your preferences, depending on your unique interests and desired destination.

While investing in global fund investments, your investment horizon and risk profile are equally important, which involve choosing the right combination of asset classes and analysing your goals. It is advisable for any investor to remember two crucial factors: diversification and asset allocation. A balanced risk-reward ratio can be achieved by investing in a variety of asset classes and diversifying your portfolio.

At first glance, global fund investments and foreign trips may appear to be unrelated topics. When you look closer, an intriguing correlation between the two becomes apparent. You tend to search online, watch videos, follow a few social media channels, discover major tourist attractions, etc. to get the idea of that place you are travelling. 

While investing in global funds you need to gain valuable insights into the interconnectedness of the global economy and discover how your financial decisions can impact your financial goals in the long-term. Expanding into international markets can be a challenging endeavour. 

Discover the essential steps to take before investing. Investing in international funds requires crucial steps:

  • Research – Without it, you may be putting your investments at risk. Before entering a new market, it’s crucial to gain a deep understanding of its unique characteristics. Take the time to analyse prevailing trends, market dynamics, and consumer psychology to ensure success. By conducting a thorough analysis, you can determine the equities and funds that are poised for future success and allocate your funds accordingly.
  • Invest – Most people who wander around the world start with their own country. The same scenario applies to global fund investments. Once people have invested in well-performing mutual funds in India, only then they will prefer investing in international funds.

You need a passport along with a visa and tickets to board foreign flight. But, fortunately this is not the case with global funds. Investing in global funds and asset classes is just as easy as investing in domestic funds. You have the option to invest directly through an asset management company (AMC), an investment advisor, or through user-friendly online investment platforms.

Now, when investing in global funds, you need to consider the tax implications

  • Taxation – You can experience the same tax implications on international funds as you would on debt funds and maximise your returns by holding your funds for over three years. And this is not all, you can also enjoy the benefits of long-term categorization and a tax rate of only 20% post-indexation. You can unlock the power of indexation factors that consider the inflation rate during the holding period and seamlessly adjust the acquisition cost to get potentially maximum returns.

Conclusion

When you book tickets, people recommend taking advice from a trip advisor. The same implies in global fund investments: take help or guidance from a fund manager before you board a flight to international funds.

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The Synergies of an Ideal Cricket Coach and an Efficient Wealth Manager

July 7, 2023

The Cricket World Cup is just around the corner, and every team is willing to outperform other teams with end-to-end planning, strategy, and team performance. Cricket is played by only 11 players on the field, but a coach guides and nurtures the talented players behind the scenes. A competent wealth manager or advisor is no different. He provides guidance and expertise to individuals who are willing to achieve financial goals. There are some synergies between cricket coaching and wealth management as both require long-term planning, teamwork, and rational approach.

The Game Plans

A proficient cricket coach develops a plan of action while keeping in mind the strengths and weaknesses of each player. On the other hand, a wealth manager finalises a financial strategy based on your goals, risk tolerance, and investment horizon of the investor. It’s part of his wealth management solutions and expertise. Winning a single match in a big tournament won’t win you the trophy in the end; similarly, a wealth manager crafts a plan that increases the success potential in the near future. He doesn’t have a plan for one or two days or even weeks, he tends to plan for long-term goals of every investor.

An expert cricket coach knows the ins and outs of a player, whether he is a batsman, a bowler, or an all-rounder. He, along with the captain, finalises the team’s batting order, bowling preferences, and fielding positions throughout the game. Similarly, in wealth management services, wealth advisors figure out how to allocate investment classes such as stocks, bonds, real estate, etc. to create a diversified team.

Teamwork  

Cricket, or any other sport such as football, hockey, or even wrestling, is a team sport. Players need to abide by the plan and the coach and player(s) dedicate themselves to a common goal. He encourages effective communication and teamwork and helps players work on their strengths.

Parallelly, wealth managers closely work with their clients to make informed decisions. They take advantage of years of experience and expertise when it comes to guiding clients towards success. This is an effective pillar of a wealth management solution. A wealth manager looks for trends, economic indicators, and the client’s goals.

Long-Term Vision: Building Sustainable Success

A cricket coach’s priorities go beyond immediate success. They develop a pipeline for future success, develop young talent, and instil discipline. Similar to this, wealth managers and advisors take a holistic approach, considering long-term goals like retirement planning, wealth preservation, and to generate wealth, in addition to managing short-term financial needs.

Final Overs: The Verdict

Both wealth management services and cricket coaching place a strong emphasis on the virtues of perseverance, discipline, and patience. Just as a wealth manager or advisor helps clients navigate market fluctuations and financial challenges, a coach assists players in overcoming setbacks and learning from mistakes. By encouraging a long-term vision and imparting important lessons along the way, both professionals work to create sustainable success. 

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How to Enter the Galaxy of Early-Stage Companies through AIFs?

June 15, 2023

Humankind took a giant leap into space in the 1960s when we first landed on the moon, and recently our machines have touched the surface of Mars too. We keep discovering new aspects of our universe. But how? Before we plunge into the universe of stars and galaxies, it’s backed up by intense research and vision.

You need to access aspects such as gravitational force and pressure in the Earth’s atmosphere, and beyond that, scientists need to access these and more factors while taking the big leap. But they still don’t have any idea of the new surface or atmosphere, despite years of intense research.

The orbit of alternate investment funds

The story of alternate investment funds is no different. When you look to invest in early-stage companies through alternative investment funds, you need to analyse a few factors. When an astronaut approaches unknown territory, he or she should be cautioned. There are a few key factors you need to consider before investing in early-stage companies through investment funds.

Before launching a rocket into orbit, astronauts and engineers examine the potential of the rocket, whereas when investing in early-stage companies through AIFs, you need to assess the company’s business model, product, or service offering. Is the new-age company meeting market demand, or does it have the potential to grow in the future?

Every project needs experts, whether you need to explore the unhidden reality of outer space or manage a team when it comes to investing. An expert team will execute the business plan, make important and informed decisions, and come up with innovative solutions that will address a significant market need.

Now, your trip to explore a new planet or star will take time; it’s not a ‘quick return’. You need to have patience to face the challenges. While investing in the early stages of companies through alternate investment funds, you need to assess the barriers to entry, potential competitors, and the company’s ability to differentiate itself in the long run. Apart from this, you need to evaluate the company’s trademark, its position in the market, and its potential for future growth. Assess the company’s financial position and how it will manage its finances effectively.

Entering the orbit and landing on a planet is a different task, but exiting outer space and entering the Earth’s atmosphere you need to have a strategy for this task too. Understand the potential exit choices for your investment, whether the company has a plan for an initial public offering or is planning some other options. A good exit strategy is crucial to getting returns on your investment.

Last but not least, analyse the risk, whether you are launching your ship into an altogether different zone or investing in early-stage companies through alternate investment funds.

Conclusion

Keep in mind that there are no guarantees of success when investing in early-stage businesses due to the inherent risks involved. Investment diversification, due diligence, and being ready for a long-term investment horizon are essential. You can increase your chances of investing wisely in early-stage companies through AIFs by carefully weighing these factors.

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How to put up a great show with your mutual funds?

June 13, 2023

“Destiny is commonly believed to possess an element of human control that fate does not. We may be helpless against the inevitable trajectory of our fates, but our destinies can be moulded by the choices we make.”

Laurie G. Fisher

Have you ever been to a circus where many talented performers, musicians, and acrobats entertain you? But for an artist, it takes years of practice, concentration, determination, and hard work to master their performance. They have to follow certain traits and training exercises to reach the end goal of entertaining you to the fullest. Acrobats need to work on their stamina; dancers need to work on their moves; magicians need to enhance their tricks behind the curtain; and the list goes on.

But success doesn’t come to those who wait; you need to apply certain parameters, methods, or approaches to succeed, and the world of mutual funds is no different.

Investors can apply five key practices to maximise their mutual fund investments

1. Create a goal and invest accordingly

An artist plans their performance according to the target audience. There are different sets of audiences for every act. Successful investors begin their investment endeavours with specific objectives in mind, such as child education, marriage, personal retirement planning, etc. The creation of goals at the outset of an investment helps to determine how much money must be allocated to which types of funds in order to achieve the investment objective with the least amount of risk, tax, and exit burden implications.

2. Periodic review

A comedian was expecting that the audience would burst into laughter after his joke, but to his surprise, no one in the audience even smiled. But he came up with a follow-up line, and the audience burst into laughter. You, as an investor, need to keep track of which investments perform better and which are consistent performers. There may be changes in tax or changes in investment objectives; you might want to track your portfolio. An investor might do well to monitor his debt investments quarterly and his equity investments annually.

3. Patience

It takes time to be a master acrobat; they develop new skills with time and patience. An amateur artist cannot expect to get it perfect in a day or two. He can fail while attempting a new trick, but with patience, he could learn the art. Successful investors maintain their patience and allow the volatility phase to pass. Over time, the law of averages catches up, and the funds deliver the anticipated returns.

4. Comparison

You cannot compare a magician with a ringmaster. Both have certain strengths and different goals for entertaining the audience. Such is the case with mutual funds; they are suitable to serve financial requirements. For recurring expenses, mutual funds can also be redeemed in parts. On the other hand, real estate and gold provide the psychological comfort of owning wealth but are seldom used to fulfil financial needs.

5. Trust your financial advisor

A dancer needs to trust his trainer while learning the new moves, or he can be injured. Which emotion he needs to put on which step, either he needs to take a pause or carry on with the performance. A trustworthy financial advisor plays a key role in managing the client’s investments as per his goals, suggests corrective action if any special situation arises, guides the client when things are not progressing as expected, and inculcates financial prudence in clients on other money matters like loans.

Conclusion

Mutual fund investing is about discipline, patience, and simplicity. Investors would do well to give the above practices some thought and make them part of their personal investment process.

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Global Funds Investment – Need to know things before investing!

May 30, 2023

What would be like to invest in your favourite international brands? Apple? Amazon? Or perhaps Netflix? You can do so by investing in Global Funds. 

But before you dive into global fund investments, let’s have a look at things which you should know about global funds solutions.

Global fund investments are also known as international funds, and they enable you to invest in foreign stocks. You can begin your global fund investments in any international company that is based somewhere other than your country. You can adjust your global fund investment portfolio for better returns and reduced risks with more options for investing in foreign funds, just like domestic mutual funds.

Before you begin, think about the following:

1. Determine the risk – 

It is crucial to evaluate the risks connected to global funds investments. Studying a fund’s track record or historical performance for at least five years is the best way to determine how well it has performed internationally. Hiring a financial advisor is a good idea, despite researching a fund’s track record and you still cannot decide on it.

2. Choose an extended investment horizon – 

Experts noticed a long-investment horizon, meaning investors who held on to their funds for a long duration experienced significant capital appreciation. By long duration, it can be for 7 to 10 years. So, until a fund’s track record shows significant returns in the short term, we recommend investing in this instrument for at least a few years.

3. Check the fund’s expense ratio of Global Funds Investments – 

A fund’s expense ratio is somewhat like that fund’s maintenance charge. It’s a percentage charged from investors for administrative management of the fund. The higher the expense ratio, the bigger the cut you must pay on your return. So, when you are planning to invest in a global fund, view and compare its expense ratio to see whether it justifies the fund’s performance. Otherwise, choose a global fund with a comparatively low expense ratio, as the money saved will only boost your long-term capital appreciation.

4. Check if the fund is diversified – 

Global funds investment solutions may be only one type of equity mutual funds, but this category can invest in diverse asset classes like stock, bonds, real estate, gold, etc. The more diversified a fund, the lower your risk exposure.

Conclusion

In addition to these 4 things, you must also figure out if the global fund investments are owned and managed by a reputed fund house or asset management company. Therefore, before investing, check how diversified the international fund is. You can do so by conducting a search online or by asking a financial expert. It is advisable to contact a financial advisor.

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Alternative Investment Funds – Gaining Popularity in India

May 29, 2023

While fixed deposits, stocks, and bonds are still good long-term investment options, many savvy investors are now opting for alternative investment funds (AIFs). These financial instruments have the potential to give high-returns by investing in various asset classes. AIFs have recently become extremely popular among the HNIs looking to diversify their portfolio and grow their assets.

India and Asia, as a whole, are poised for the next significant expansion of alternative investment products. According to a report by Anand Rathi, AIFs in India are expected to grow by 25% between 2022 and 2025. The industry and the market are currently geared toward an alternative investment funds paradigm shift.

According to a report, wealth managers offering AIF products as alternatives to high net worth individuals (HNIs), family offices, and insurance companies will drive overall investments through AIFs to grow at a 25% CAGR between 2022 and 2025.

What are Alternative Investment Funds?

AIFs are essentially pooled investments that also invest in futures, hedge funds, private equity, and venture capital. Although the Securities and Exchange Board of India (SEBI) only introduced AIFs in 2012, they have quickly grown in popularity among many investors. High-net-worth investors can access assets that might not be directly related to the stock market through alternate investment funds (AIFs). In addition, compared to mutual funds and bonds, it provides them with investment diversification and potentially higher returns.

Let’s discuss in detail different types of Alternative Investment Funds in India.

Category I

This category includes Category I AIFs that invest in SMEs, start-ups, and other small businesses with high growth potential. Additionally, the Indian government provides tax breaks for people who invest in this sector. Due to the fact that investments in Category I appear to have a multiplier effect on the economy in terms of wealth and job creation.

Venture Capital Funds (VCF): VCFs invest in start-ups with high valuations who, however, are momentarily lacking in funding for expansion. VCFs invest in high valuation ventures by pooling money from individual investors.

Infrastructure Funds (IF): These funds make investments in the construction of public facilities like roads, bridges, dams, and rail lines. Dividend income and capital gains are typically combined to form the returns from this type of AIF.

Social Venture Funds (SVFs): They invest in businesses with a strong social conscience. These businesses make money while resolving environmental and social problems.

Angel Funds: Venture capitalists form an angel fund, a type of VCF, to support start-up businesses or aid in their growth.

Category II

Funds for Private Equity (PE): You can invest in unlisted private companies through PE funds. This sub-category is chosen by people who want to diversify their financial portfolio and include a potentially high-risk AIF.

Fund of Funds: The Fund of Funds combines numerous AIFs into one.

Debt Fund: As its name implies, this type invests in debt securities of both publicly traded and privately held businesses.

Category III

Private Investment in Public Equity: These funds are pooled and specifically designated for investments in public equity. Private investment in public equity funds.

Hedge Fund: Hedge funds pool capital from both individual and institutional investors to make high-yield investments in domestic and foreign markets.

The traditional investment tools that investors are now exposed to include direct investments, mutual funds, unit-linked insurance plans, and portfolio management services. But the main purpose of these options is to trade securities. Investor demand for alternative investments remains unfulfilled.

Conclusion

Although investing in AIFs can be very profitable, there is a significant learning curve involved in doing so. Get financial advice from financial experts, if you want to invest in AIFs. Develop your investing skills while our team supports and grows your wealth with specialised wealth management solutions.

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Trends and factors that are influencing private wealth management in India

May 22, 2023

India’s wealth management industry is changing rapidly. The prosperous middle class is growing while the country’s high net individual population is estimated to grow by 75% from 3.5 lakhs in 2020 to 6.11 lakhs in 2025, according to a report. Ultra-high net worth individuals are expected to excel by 63% in the given period. India witnessed a record 14.2 million new demat accounts being activated in FY 21, the report signifies. 

Trends you should know about Private Wealth Management 

Exciting new opportunities are creating some positive transformation for wealth management solutions. If your business seeks to leverage these opportunities, then you need to know these trends:

  1. The makeup of investors is changing: The new generation of Millennial and Gen Z investors are always connected and prioritise using technology. They want to be able to communicate with financial advisors in real time via all available channels, including text messages and video chat. Additionally, they need constant access to investment options and portfolio information. This requires re-constructing the traditional investment ecosystems which are tailor-made to their demands.
  1. A hybrid future of wealth management services: The foundation of the wealth management solutions lies on personal relationships and human connections – and this will continue to be so. Customers still expect to be treated with compassion, honesty and understanding. However, they also look for experiences that are quicker, more practical, and smoother. The key enablers include digital technologies like robo-advisors and self-service investment portals. To increase productivity and respond to client demands more quickly, advisors will also adopt digital tools and process automation.
  1. Emergence of alternative asset classes: Millennials are very concerned about social and environment issues due to which ESG investing is becoming more popular. Young investors are shifting to non-traditional investments like passive investing, unlisted companies, private equity investing, etc. They actively seek out investment options that align with their environmental values.  
  1. Increasingly, advisory firms are subject to regulatory scrutiny. For example, the Securities and Exchange Board (SEBI) of India is paying more attention to advisory firms’ fee structures, data security and privacy procedures, adoption of AI/ML, use of crypto assets, and ESG (environmental, social, and governance) funds. Tax increases are also anticipated, which is a huge worry for investors. Advisory businesses will need to have a solid compliance program and system of controls in place in order to be proactive prepared.
  1. The “financialization of savings” is accelerating: Historically, physical assets like gold and real estate accounted for 95% of household wealth in India. However, investors are now favouring financial savings over tangible ones. They are more conscious that, in the face of rising inflation, an excessive concentration of wealth in non-financial assets might produce unfavourable returns. They can experience better returns and greater efficiency in terms of liquidity and contingency planning with a more balanced approach to portfolio creation.
  1. Financial planning is becoming more holistic: The newest investors are fusing monetary objectives with moral and non-material objectives. They are searching for more all-encompassing investment solutions that cover social welfare, impact investing, estate preparation, and retirement planning.
  1. Hyper-personalization is essential right now: A one-size-fits-all strategy is no longer effective with investors. They demand carefully chosen, specially tailored, and contextually relevant offerings. Whether it’s investment products, marketing emails, or call centre service, every customer touchpoint needs to be personalised to gain customer loyalty and trust.

Conclusion

India’s private wealth management industry is poised for significant growth, driven by shifting investor demographics, emerging alternative asset classes, and rising regulatory scrutiny. With the increasing affluence of the middle class and the growth of the high-net-worth individual population, wealth management firms must adapt to meet the evolving needs and expectations of investors. By embracing digital solutions, incorporating non-traditional investment opportunities, and providing more holistic and personalised services, private wealth management firms can capitalise on these exciting new opportunities and position themselves for success in the years to come.

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