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nformation provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.
Variety is the spice of life. At the same time, you do not seek variety just for the sake of it. Some variety is required simply because the situation demands it.
There are different Mutual Fund schemes for different purposes – to fulfil the different needs of different investors.
Let us look at the basic requirements of investments. An investor mainly needs a combination of four things:

(1) Safety of capital
(2) Regular income
(3) Liquidity
(4) Growth of capital invested.

There are Mutual Fund schemes available to serve these needs. Look at the table below to know more. (please make a same table like this as we don’t wish to disclose the source)



A Mutual Fund invests in various asset classes, as per the Scheme Information Document (SID). Typical examples of proposed asset allocation for a scheme could be:

· An equity fund may invest 80% to 100% in equity; 0% to 20% in money market securities

· A balanced fund’s asset allocation may look like 65% to 80% in equity; 15% to 35% in debt securities; 0% to 20% in money market securities

In most cases, the allocation in an asset category is mentioned as a range. The fund manager cannot change the asset allocation beyond the limits set in the SID but is allowed to change it within the given boundaries. For example, within equity, the allocation between large-cap and mid-cap companies is not mentioned above, which allows the fund manager flexibility to maintain different allocation between large-cap and mid-cap at different times.

If there is a need to make a change in the asset allocation of the scheme, the fund management company must take the approval of the fund’s trustees and existing unit holders. The company also has to announce the proposed change in public. All the existing investors can exit the scheme for 30 days, without paying exit loads, if any.
Dividends from Mutual Fund schemes are tax-free in the hands of the investor but are subject to Dividend Distribution Tax (DDT) at the source. DDT paid by the scheme reduces the distributable surplus available for investors.

Currently, equity-oriented schemes (schemes with >=65% allocation to equities) are subject to 10% DDT along with 12% surcharge and 4% cess, making effective DDT be 11.648% for all types of investors whether resident Indians, NRIs or domestic companies. Non-equity-oriented schemes are subject to 25% DDT along with 12% surcharge and 4% cess, making effective DDT be 29.12% for both resident Indians and NRIs.

Infrastructure Debt Funds that invest in the infrastructure sector are subject to DDT of 25% for Resident Individuals and 5% for NRIs making effective DDT be 29.12% and 5.824% respectively.

Since dividends are distributed out of the profit made by a scheme, a higher DDT reduces the post-tax dividend available to investors. It may be wiser to opt for growth option if you are not looking for dividends as a source of income from your Mutual Fund investments. Going for a Systematic Withdrawal Plan (SWP) would be a better thing to do if you need regular cash inflow.
Please do not reply back to this mail. This is sent from an unattended mail box. Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.