Liquid funds or low duration funds are good options to park your short term money and get attractive returns (currently 6-7% p.a.). But for people in the highest tax brackets (30%), arbitrage funds make sense as these funds offer Equity taxation but returns like debt funds.

Why Arbitrage funds :

Low Risk - Arbitrage funds offer unique low Risk investment compared to liquid funds or FD.

Tax Advantage

• Theres’s tax advantage due to Equity Taxation for short term 20% and long term (12.5% After 1.25 lakhs)
• Appealing especially for investors in higher tax brackets.

Potential of better returns - Returns are good Arbitrage funds likely to earn 7-8% returns annually.

Liquidity - Investors can redeem their units at any time providing flexibility compared to some other investment vehicle.

In summary Arbitrage funds offer a unique investment strategy that balances risk and return by exploiting price inefficiencies across markets. They are suitable for investors with a low-risk appetite looking for better returns than traditional fixed income options while benefiting from tax efficiencies associated with Equity investments.

A blog from Santosh G Akerkar. For Educational and Awareness purposes.
Best Regards,
Santosh Akerkar

Life is full of uncertainties and unexpected events; it was about being prepared for the unexpected and having a safety net to fall back on that matters the most.

Financial stability forms the bedrock of peace of mind. Why you have a stable financial foundation, you can face life challenges with confidence and less stress. Financial stability means having enough resources to cover your basic needs, handle emergencies and plan for the future.

Consider a life without worry about bills, debts or unforeseen expenses. This state allows you to focus on personal growth, relationships and pursuits that bring you joy and fulfilment.

Financial Education

Knowledge is power, especially when it comes to managing your finances, educate yourself on personal finance. Topics such as budgeting, saving, investing and debt management. Understanding these concepts empowers you to make informed decisions and take control of your financial future.

Many resources are available to help you improve your financial literacy including books, online courses, podcasts and workshops that take advantage of these tools to enhance your understanding and confidence in managing your finances.

Seeking Professional Advice

Sometimes seeking professional advice can provide clarity and direction for your financial journey. Financial advisors can offer personalized guidance based on your unique situation and goals. They can help you to create a comprehensive financial plan, recommend investment strategies and provide support during difficult times.

At Akerkar Wealth we do personalised financial planning and advice for your goals. In the last 20 years of our journey, we are obsessed with the financial transformation of our clients.

Creating success stories is our Goal.

A blog from Santosh G Akerkar. For Educational and Awareness purposes.
Best Regards,
Santosh Akerkar

RBI maintains the status quo at 6.5% keeping the Repo rate unchanged and focused on the withdrawal of accommodation stance.

Reasons for RBI to maintain Repo Rate.

1. RBI concerned about inflation.
2. Normalizing a high rate environment.
3. RBI trying ensure inflation particularly food inflation should get in RBI target area.

Our Take

EM central Banks policies were mostly run by Fed. Unless typically wrong with very high Inflation and current account deficit.

Fed likely to cut rate in sept policy meet. So, we think RBI is likely to cut the rate in Dec,2024.

In the past after first rate cut by fed equity markets go through correction. Rates cut are good for bond market. Debt market will see rally in next 2-3 years and it can give 2-3 % more over real rates.

Equity markets will become volatile with negative bias. Stay away from mid and small cap. Stay away from thematic funds (Defence) as well. There can be price or time correction. Good time to get in Large cap funds and consumption (premium) focused funds.

In short RBI in no hurry to be the first to cut.

A blog from Santosh G Akerkar. For Educational and Awareness purposes.
Best Regards,
Santosh Akerkar