Latest news with #MiraeAsset
Mint
a day ago
- Business
- Mint
Why historical data on withdrawal rate misleads Indian retirees
How much can an Indian retiree withdraw each year without exhausting their savings? Unlike in developed markets where long-term data helps answer this question, India's limited market history and falling asset returns make the past a poor guide. In markets like the US, financial data stretches back over a century, providing a robust base for empirical research. William Bengen leveraged this long history in his landmark study on safe withdrawal rates. Analysing rolling 30-year retirement periods, he found that a 4% initial withdrawal—adjusted annually for inflation—would have preserved a retirement portfolio across all historical scenarios. This insight became known as the '4% rule." India, by contrast, has a much shorter data record. Its oldest equity index, the Sensex, dates back to 1979—just 45 years of history, which is relatively limited given that retirement typically spans about 30 years. To work around India's limited financial history, we examined all available rolling 30-year periods starting from June 1979. The first window spans June 1979 to May 2009, the next July 1979 to June 2009, and so on. For each period, we calculated the safe withdrawal rate—defined as the highest inflation-adjusted annual withdrawal that wouldn't exhaust the portfolio over the retirement horizon. Also read: What makes Mirae Asset's Swarup Mohanty paranoid about his retirement corpus Historically, most of these 30-year periods yielded safe withdrawal rates above 4%. But this does not mean future retirees can afford to be equally generous. India's asset returns have steadily declined over time. With both equity and debt returns trending lower, back-tested results may not just fail to predict future outcomes—they may actively mislead. Falling inflation offers little consolation. It hasn't fallen far enough to preserve real returns. The inflation-adjusted returns on a typical balanced portfolio have continued to shrink, suggesting that future retirees are unlikely to enjoy the same portfolio performance as earlier generations. Also read: Is early retirement a good idea? Not for your health Back-testing isn't enough When historical data reveals a clear directional trend—upward or downward—simple back-testing becomes an unreliable tool. In such cases, forward-looking models like Monte Carlo simulations provide a more realistic assessment. These simulations generate thousands of possible return paths under varying assumptions, capturing the uncertainty that lies ahead more effectively than backward-looking analyses. My 2022 study on withdrawal rates in India, which relied on Monte Carlo simulations, found the widely accepted 4% rule to be overly optimistic. In nearly one-third of simulated scenarios, a 4% withdrawal led to premature portfolio depletion. However, reducing the rate to 3% dramatically lowered this risk. A 2024 follow-up study, co-authored with Rajan Raju, reinforced these findings—estimating a safer withdrawal range of 3% to 3.5% for Indian retirees. In developed markets, where deep data histories exist, the past can serve as a reasonably reliable guide. In India, with a shorter and more flattering past, that luxury doesn't hold. Retirees must look forward, not back. In this environment, prudence—not nostalgia—calls for a lower safe withdrawal rate. Also read: How to effectively diversify the retirement corpus? Ravi Saraogi, CFA— Sebi registered investment adviser and co-founder, Samasthiti Advisors.
Korea Herald
3 days ago
- Business
- Korea Herald
Time to pivot to China, India and move beyond US: Mirae Asset vice chairman
As cracks emerge in the US-centered investment landscape -- driven by geopolitical uncertainty and waning global confidence -- Mirae Asset Securities Vice Chairman Heo Sun-ho called for a strategic rebalancing toward China and India. Speaking at a global asset allocation forum hosted by Mirae Asset in Seoul on Thursday, Heo said the global financial market has relied heavily on the US as its primary growth engine over the past three years. However, with the return of President Donald Trump and the onset of a high-tariff era, he warned that the global trade order is being reshaped. 'The recent depreciation of the US dollar reflects weakening global confidence, spurred by growing nationalism and ballooning fiscal deficits,' Heo said, urging investors to pivot from a US-centric strategy and realign their portfolios with the shifting global innovation landscape. China and India, he said, represent promising alternatives. 'Innovative technology that once fueled US growth is no longer its exclusive domain,' he added, pointing to China's accelerating technological self-reliance, supported by pro-market policy shifts. He cited examples such as Chinese AI startup DeepSeek positioning itself as a challenger to OpenAI, and BYD, which in April overtook Tesla in the European electric vehicle market for the first time. Meanwhile, India is emerging as a vast consumer market, Heo said, powered by robust digital infrastructure and a rapidly expanding population. His remarks come amid a noticeable cooling of Korean retail interest in US equities following a period of record buying. As of May 26, Korean individual investors had sold a net $1.065 billion (1.46 trillion won) in US stocks -- their first net sell-off in seven months. Even longtime favorites like Tesla and Nvidia saw combined net sales of about $306 million during the week of May 19-23. Echoing the call for a diversified investment strategy, Lee Phil-sang, director and head of Asia Pacific Research at Mirae Asset Hong Kong, highlighted China's healthcare tech sector as a compelling opportunity. He cited the country's deep talent pool as a key factor driving its progress toward catching up with the more established US biopharmaceutical industry. 'China has made significant strides in new drug development over the past four years. In 2010, its output in this field was minimal, but it now ranks second globally,' Lee said. Chinese biotech firms such as Beigene, Akeso, Hansoh, and Eccogene have been expanding globally through out-licensing deals and international clinical trials. Lee said that China is also taking the lead in advanced drug modalities, including antibody-drug conjugates, targeted cancer therapies linking antibodies to toxic agents, and bispecific antibodies, designed to bind two different antigens for enhanced efficacy. Policy shifts in China are also creating a more favorable environment for foreign investors, Lee said. Whereas past periods of double-digit economic growth often led to excessive government investment and harmful oversupply, a slowing Chinese economy is now helping to differentiate true market leaders. 'China's slow growth isn't necessarily negative,' Lee said. 'It's in low-growth conditions that world-class enterprises emerge. When a leading company dominates the domestic market and expands overseas, it sets the stage for the rise of truly global champions.'
Korea Herald
21-05-2025
- Business
- Korea Herald
Mirae Asset Global tops W400tr in AUM, with 45% overseas
Mirae Asset Global Investments, the asset management arm of Korea's Mirae Asset Financial Group, has surpassed 400 trillion won ($288 billion) in assets under management, with 45 percent of its portfolio operated overseas. The company announced Wednesday that its total AUM had reached 403 trillion won, continuing a steady upward trend from 305 trillion won at the end of 2023 and 378 trillion won at the end of 2024. Of the total, 181 trillion won — approximately 45 percent — is managed in overseas markets across 16 regions, including the United States, Vietnam, Brazil, the UK, India and Japan. This marks a significant increase from 147 trillion won in overseas assets as of May 2024. The asset manager attributed its rapid growth largely to its exchange-traded fund portfolio. Mirae Asset currently oversees approximately 212 trillion won in ETFs globally, surpassing the entire domestic ETF market, which stands at around 200 trillion won. Over the past decade, while global ETF managers saw an average annual growth rate of 17.8 percent, Mirae Asset's ETF business grew at a rate of 34.4 percent — nearly double the industry average. Its US-based ETF affiliate, Global X, has grown from managing 8 trillion won in 2018 — when it was acquired by Mirae Asset — to now managing 80 trillion won. Global X EU, its European arm, has recorded an average annual growth rate of 182 percent over the past five years. In April, the firm announced that its Australian unit, Global X Australia, manages assets worth 10 billion Australian dollars ($6.4 billion), more than double the A$4.64 billion in assets it managed when acquired in 2022. 'Mirae Asset Global Investments leverages its robust global network to conduct diversified asset allocation across international markets and utilize a wide range of investment vehicles,' said Kim Young-hwan, head of innovation and global business at Mirae Asset Global Investments, via a press release. 'We will continue to introduce competitive products that drive market innovation and support investors' financial well-being in retirement.'
Mint
11-05-2025
- Business
- Mint
How the India-UK Double Contribution Convention benefits employers and employees
On 6 May, India and the UK took a monumental step in strengthening their economic ties by finalizing a landmark free trade agreement (FTA). It's not just a trade pact; it represents a commitment to fostering deeper economic collaboration between two of the world's largest democracies. Alongside the FTA, both nations have agreed to negotiate a reciprocal social security treaty—the Double Contributions Convention (DCC)—which is expected to significantly impact businesses and employees moving between the two countries. The Double Contributions Convention The DCC is designed to facilitate the movement of employees between India and the UK by addressing the complexities of social security contributions. Under the current system, Indian nationals working in the UK are required to contribute to the UK National Insurance Contributions (NIC) after a 52-week exemption, if applicable. Also Read: What makes Mirae Asset's Swarup Mohanty paranoid about his retirement corpus However, this system has its drawbacks, particularly for those who do not stay in the UK long enough to benefit from the contributions they make. For instance, Indian nationals may not receive any benefits if they work in the UK for less than 10 years. The DCC aims to resolve this issue by allowing employees temporarily working in the other country for up to three years to pay social security contributions in their home country. This provision is crucial as it prevents the fragmentation of social security records, ensuring that employees maintain continuous coverage and benefits. Benefits for Indian nationals in the UK One of the most significant advantages of the DCC for Indian nationals is the exemption from paying UK NIC for a period of three years. This exemption means that Indian employees can continue contributing to the Employees' Provident Fund (EPF) in India, enjoying uninterrupted social security benefits. This arrangement not only eases the financial burden on Indian workers but also allows them to retain their social security benefits in India, which is particularly important for those who plan to return home after their stint in the UK. However, it is essential to note that Indian nationals working in the UK may still be required to pay the UK immigration health surcharge. This surcharge is a separate fee that contributes to the National Health Service (NHS) and is applicable to all foreign workers in the UK. Implications for UK nationals in India The DCC also extends its benefits to UK nationals working in India. Currently, UK nationals qualify as 'international workers' under the EPF Scheme in India, which mandates that employers contribute 24% of the gross salary. Upon reaching the age of 58, individuals can claim a full refund of their contributions, along with interest, upon leaving India. Also Read: Details on rent, home loan, TDS: ITR forms seek more disclosures this year Under the DCC, UK nationals temporarily working in India will be exempt from contributing to the EPF for three years. Instead, they will continue to contribute to the UK NIC, ensuring that they maintain their social security benefits in the UK. This reciprocal arrangement is expected to encourage more UK nationals to consider employment opportunities in India, knowing that their social security contributions will not be adversely affected. Early withdrawal benefits and future considerations A critical aspect of the EPF Scheme is that it allows International Workers from countries with which India has entered into social security agreements to claim full withdrawal of their contributions upon completion of their Indian employment, regardless of their age. However, it remains unclear whether UK nationals who have previously contributed to the EPF will be eligible for early withdrawal benefits under the new DCC. As the DCC is still in the negotiation phase, both countries will need to clarify this point to ensure that UK nationals are fully informed of their rights and benefits. The successful implementation of the DCC will depend on the completion of relevant processes in both India and the UK, and stakeholders will be closely monitoring its progress. A step towards enhanced economic ties The India-UK FTA and the accompanying DCC represent a significant leap forward in the economic relationship between the two nations. By addressing the complexities of social security contributions, the DCC is poised to facilitate smoother employee mobility, fostering greater collaboration between Indian and UK businesses. Also Read: Fund houses suggest these four tweaks to make mutual funds even more sahi As both countries work towards finalizing the DCC, it is essential for employers and employees to stay informed about the benefits and implications of this agreement. The DCC not only promises to enhance the social security landscape for employees moving between India and the UK but also signifies a broader commitment to strengthening economic ties and promoting mutual growth. As these agreements come into force, they will undoubtedly pave the way for new opportunities and collaborations, benefiting businesses and employees alike. Sonu Iyer is partner and national leader, people advisory services-tax, EY India, and Puneet Gupta is tax partner, EY India.
Time of India
09-05-2025
- Business
- Time of India
Best tax saving mutual funds or ELSS to invest in May 2025
Tax -saving mutual funds or Equity Linked Savings Schemes (ELSSs) helps you to save income tax under Section 80C of the IT Act. You can invest a maximum of Rs 1.5 lakh in ELSSs and claim tax deductions on your investments every financial year. Are you interested? Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Best ELSS or tax saving mutual funds to invest in May 2025: Canara Robeco ELSS Tax Saver Fund Mirae Asset ELSS Tax Saver Fund Invesco India ELSS Tax Saver Fund DSP ELSS Tax Saver Fund Quant ELSS Tax Saver Fund (new addition) Bank of India ELSS Tax Saver (new addition) Tired of too many ads? Remove Ads Most taxpayers make their investments in the last three months of the financial year (January-March). Most of them look for the investment options available under Section 80C of the Income Tax Act (IT Act). The Section 80C of the Income Tax Act allows tax deduction of up to Rs 1.5 lakh in a financial year on investments in a few specified instruments. If you are trying to save taxes in this financial year, you can consider investing in tax-saving mutual funds or -saving mutual funds or Equity Linked Savings Schemes (ELSSs) helps you to save income tax under Section 80C of the IT Act. You can invest a maximum of Rs 1.5 lakh in ELSSs and claim tax deductions on your investments every financial year. Are you interested?Before proceeding further, you should familiarise yourself with ELSSs. Tax saving mutual funds or ELSSs invest in stocks. Therefore, they have a very high risk. You should be aware of this aspect, especially if you are a first-time investor in equity mutual funds. Compared to your usual investments like Public Provident Fund or National Savings Certificate, etc, ELSSs do not offer guaranteed returns. You may even suffer losses in a bad why should you invest in ELSSs? One, these schemes have the potential to offer higher returns over a long period. As you know, tax saving schemes invest in stocks. And stocks typically offer higher returns over a long period of time. For example, the ELSS category offered an average return of around 11.89% over 10 ELSS funds have the shortest lock-in period of three years among tax saving investments. Most other investment options under the 80C basket are government-backed investments. They typically come with longer lock-in periods. For example, PPF is a 15-year product that allows partial withdrawals after six years. The NSC is a five-year product. So, if you want access to your money in three years, you should invest in ELSSs. But don't count on it to offer you great returns in three years. You should always keep in mind that equity investing is for the long term. You should invest in equity mutual funds only if you have an investment horizon of five to seven the third and the most important point to remember is that ELSSs is an entry point for many investors into investing in stocks. Many investors often start with ELSSs and the mandatory lock-in period of three years in these schemes helps them to weather the volatility in the stock market. Once these investors see the rewards coming in, say, five or seven years, they start investing more money in equity you are interested in investing in these schemes, here are our recommended ELSSs you may consider investing in these schemes. Invesco India Tax Plan Fund has been in the third quartile for the last 10 months. The scheme had been in the fourth quartile earlier. Canara Robeco Equity Tax Saver Fund has been in the third quartile for the last nine months. The scheme had been in the fourth quartile earlier. Mirae Asset Tax Saver Fund was in the third quartile for 15 months. ETMutualFunds has employed the following parameters for shortlisting the equity mutual fund daily for the last three Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.i) When H = 0.5, the series of returns is said to be a geometric Brownian time series. This type of time series is difficult to When H is less than 0.5, the series is said to be mean When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the seriesWe have considered only the negative returns given by the mutual fund scheme for this measure.X =Returns below zeroY = Sum of all squares of XZ = Y/number of days taken for computing the ratioDownside risk = Square root of ZIt is measured by Jensen's Alpha for the last three years. Jensen's Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the returns generated by the MF Scheme = [Risk Free Rate + Beta of the MF Scheme * {(Average return of the index - Risk Free Rate}For Equity funds, the threshold asset size is Rs 50 crore
