An underrated solution, finding its due: Radhika Gupta reacts on tax-efficient options beyond equities
Agencies Wealthy investors seek tax-friendly options outside stocks. Edelweiss Multi Asset Allocation Fund offers a solution.
With stock prices running high, cautious investors are staying away from the market, but for wealthy investors looking for tax-friendly options outside of stocks, some new mutual fund strategies are proving to be attractive choices, on which Radhika Gupta, CEO of Edelweiss Mutual Fund, says that an underrated solution is finding its due.
he posted on the social media platform X that, 'An underrated solution, finding its due! For the last two years, we have worked to provide a tax-efficient fixed income alternative in Edelweiss Multi Asset Allocation Fund using arbitrage in various asset classes. The track record of both returns over 1/2Y and risk (no negative months) speaks for itself.'
An underrated solution finding it's due!
For the last two years we have worked to provide a tax efficient fixed income alternative in Edelweiss Multi Asset Allocation Fund using arbitrage in various asset classes. The track record of both returns over 1/2Y and risk (no negative… pic.twitter.com/UavzkGrkYg — Radhika Gupta (@iRadhikaGupta) May 27, 2025
Also Read | Nifty up 13% from April's low. How should mutual fund investors alter their investment strategy?
Over the last two years, Edelweiss Mutual Fund has quietly worked on a unique approach that addresses this exact concern—a tax-efficient fixed income alternative via the Edelweiss Multi Asset Allocation Fund, and the track record of both returns over one or two years and risk (no negative months) speaks for itself.
She posted a photo of a news article, which was published in ET, saying, 'Top tax-efficient MF strategies for risk-averse investors.' The news article was about categories such as arbitrage funds, income plus arbitrage FoFs, multi-asset allocation, and precious metal funds (gold/silver) are gaining traction as these funds typically avoid direct equity exposure while offering better post-tax returns than traditional fixed income.
The ET article mentioned that multi-asset allocation funds that can invest in diverse asset classes, if held for two years, the gains are taxed at the rate of 12.5% and if held for less than two years, the gains are added to the investors' income and are taxed as per slab rates. These funds are used by investors as debt allocation for tax efficiency, and Edelweiss Multi Asset Allocation Fund was the top scheme with a 9.27% return in a one-year period.The other categories that investors' are focussing on are arbitrage funds, income plus arbitrage FoF, gold ETFs, and silver ETFs. According to the ET story, Edelweiss Silver ETF was also among the top silver ETFs and has offered 7.05% return in the last one year.In case of arbitrage funds, investors who hold for less than a year pay 20% short - term capital gains and those who hold for more than a year, pay 12.5% LTCG and these funds can be used for short term parking of funds or to move from debt to equity using staggered method.
Also Read | Radhika Gupta explains why she is saving Rs 10 crore for her son's education
Income plus Arbitrage FoF is a new category of schemes that invest a little less than 65% in fixed income with the balance in arbitrage strategies and some funds also invest in schemes of other fund houses. In this category, if the scheme is held for two years, gains are taxed at the rate of 12.5% and if less than two years, the gains are added to investors income and are taxed as per slab rates. Investors use Income plus Arbitrage FoF funds as debt allocation for tax efficiency and none of the schemes in the category have completed a year of existence in the market.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
3 hours ago
- Time of India
Co, LLP incorporations surge in May on investor optimism
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel New Delhi: Company incorporations jumped 29% in May from a year before and those of limited liability partnerships (LLPs) surged 37%, as strong economic growth and consumption outlook over the medium-to-long term continued to encourage investors to set up many as 20,720 companies, including overseas entities, got incorporated in May, against 16,081 a year earlier, showed the latest corporate affairs ministry data With this, company registrations rose for a fifth straight month through the number of LLPs that got incorporated in May stood at 7,487, compared with 5,464 a year rates of increase in company and LLP incorporations in May were partly aided by a favourable base effect."The country's growth prospects continue to remain strong, and so do its macroeconomic fundamentals. Consumer sentiments have improved. These give investors the confidence to take advantage of the country's growth story," a senior government official had told ET late May.A sustained push for ease of doing business and lower compliance burden for companies have helped, the official had said. The strong run of incorporations in recent months comes despite a continued crackdown on shell spike in LLP registrations in recent years has been supported by robust services trade, according to experts. Services exports grew 13.6% last fiscal to touch a record $387.5 billion, even though merchandise despatches remained flat at $437 billion amid external will remain the world's fastest-growing major economy over the next two years, according to the International Monetary Fund (IMF), which expects the country's rates of expansion to touch 6.2% in 2025 and 6.3% in Indian finance ministry expects a growth rate of 6.3-6.8% in FY26, as projected in the latest Economic Survey. The growth would be driven significantly by strong private consumption and resilient services exports, chief economic advisor V Anantha Nageswaran said last rate of expansion would enable India to beat Japan to emerge as the world's fourth-largest economy in FY26, as per the IMF's GDP forecast, Nageswaran said. The number of companies incorporated in 2024-25 dropped 2.2% on-year to 181,135, after record incorporation the previous year. But a record 68,669 LLPs got registered last fiscal, up 16.4% from a year before.
Time of India
4 hours ago
- Time of India
'Trade impact of US tariffs likely soon': OECD's Alvaro Santos Pereira
The Russia-Ukraine conflict escalation poses a significant threat to the global economy, potentially impacting energy prices and overall growth. Trade policy uncertainties, particularly US tariffs, are already affecting consumer and business confidence, leading to downgraded growth forecasts and increased inflation risks. Despite global headwinds, India remains a growth champion due to strong investment, consumption, and continued reform momentum. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Any further escalation in the Russia-Ukraine conflict will have a significant downward impact on the global economy, said Alvaro Santos Pereira, chief economist at the Organisation for Economic Cooperation and Development. He told ET's Deepshikha Sikarwar in an interview that India continues to be the champion of growth and the reason it continues to show bright economic performance is the constant emphasis on has been a significant change in trade policy, especially in the US in the past few months. The average effective tariff of the US has risen from 2% to about 15.5%. This would be the highest average effective tariff in US since 1936. If you consider the ones announced on April 9, then the US will have the highest-ever effective tariff rate since 1890. Uncertainties around it are having an impact in many countries in terms of consumer confidence and business confidence. And, so the activity indicators and manufacturing have also been deeply affected and are declining. As a consequence, this would have an impact on consumption and on the trade side, we have not seen the big changes yet, because in the first quarter of this year there's been significant front loading of exports from a lot of countries and firms to the US. The trade impact will likely come soon. We've downgraded almost every country in terms of growth and we are also upgrading inflation escalation of conflict clearly will have an impact. We've been seeing this for a while, both in Europe and the Middle East. Both these conflicts led to lower growth prospects for the world economy. The Ukraine-Russia conflict has had an impact on energy as well, and there is a likelihood energy prices would be affected. Conflict will have a significant downward impact on the economy, so that's why we hope there will be a been an impact on the financial markets. In fact, volatility has been dramatically high in the last couple of months or so. There have been a few corrections and now the markets seem to be recovering. But I think if there is further escalation on tariff front, and if there are further relational trade barriers, I would not be surprised that markets will react. Emerging market economies besides financial markets are also significantly affected by interest rate differentials between their own and the continues to be the champion of growth among the G20 and the world economy because of very strong investment and consumption, which is strengthening because of the rising real incomes and lowered income taxes. We expect that heightened trade conflict will have an impact on export growth, mostly because of lower global reason India continues to have bright economic performance is continuous emphasis on reforms and the reforms momentum over the last 10 years. What is impressive is that after the first wave of reforms, such as the GST, competitive federalism, and others, the reform momentum has continued. Strong investment witnessed in India is a reflection of how these reforms are paying in the medium term, but yes, in the short term. In the case of US, we are not forecasting right now. Because of tariffs we believe that inflation will peak around 4% in the US and, as a consequence, we believe there won't be changes in policy rates this other countries, it really depends on their circumstances. In India, there's still some room to lower rates, but other countries like Brazil, it is just the opposite. So, it would really depend on the specific circumstance of a country. But we know that tariffs and all these trade barriers have increased inflationary pressures, and that obviously makes the role of monetary policy more difficult.
Economic Times
4 hours ago
- Economic Times
Steve Jobs' forgotten life lesson resurfaces: 'The world is built by people no smarter than you'
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online.
