July 2019 - VSRK Capital

On 5^th July 2019, the Union Finance Minister Nirmala Sitharaman announced the financial budget for the Assessment year 2020-21. It had many pragmatic amendments affecting the general investment practices of a regular investor and the MSMEs.

The budget has announced many changes, in the MSME sector, such as proposing ease in angel tax for start-ups, removing the requirement of scrutiny of angel tax from IT department for start-up, enabling e-verification mechanism for establishing investor identity and source of funds for start-ups, 2% interest subvention for GST-registered MSME on fresh or incremental loans, ‘stand up India’ scheme to continue till 2025, new television channel for start-ups and pension benefit extended to retail traders. All these changes are sought to have a positive impact on the MSME sector and flourish the growth of start-ups. Also, the start-ups are being given a whole set of tax benefits.

The investment sector has also met some changes such as simplification and formalisation of existing KYC norms for FPIS to make it more investor-friendly, long-term bonds for market to allow FIIS & FPIS investment in debt securities issued by NBFCs, credit guarantee enhancement corporation to be set up long-term bonds with specific focus on infra sector and propose social stock exchange under SEBI for listing social enterprises & voluntary organizations.

All these changes along with those in other sectors have led to huge swings on Budget day. An examination of trading data shows that the Sensex has swung an average of 3.1 percent in past 21 budget day sessions. The India VIX index ended at 13.53, down 1.2 percent on Thursday. The index has cooled off sharply from May’s high of 28.7.

‘We will ask SEBI to mull a rise in MPS for listed companies from 25% to 35%,’ said Finance Minister Nirmala Sitharaman, during the budget speech. While this move will ensure more public investment in equity markets it will also force corporates to go on a public offering spree.

This can be seen by the downfall of the market value of TCS by Rs. 30,400 crores after the union budget. The IT giant has a public float of 28% with Tata Sons holding the rest. If the proposal is implemented, Tata Sons would need to sell share worth Rs. 57,000 crore.

All these are implemented in order to increase the contribution of start-ups and MSMEs in the country’s economy as well as include the general public’s participation in the investments in corporate giants. The union government has also sought to spur growth with a reduction in corporate tax and sops to the housing sector, start-ups, and electric vehicles. This budget is the first since the BJP led by Prime Minister Narendra Modi returned for a second term in power and is aimed at boosting infrastructure and foreign investment. The budget is said to be presented with a 10-year vision in mind. ‘The budget is for a New India and has a roadmap to transform the agriculture sector of the country, this budget is one of hope’, says Narendra Modi.

Modern Case Scenario

In this modern world of Investing, people like Warren Buffet and Geraldine Weiss, who are considered as legendary investors, have always advised not to depend on any single source of income and have continuously warned the world about the catastrophic results which over-dependence on any one source of earning can cause. In the past, we have seen scenarios such as the case of Jet airways where a huge group of people were retrenched and lost their jobs. Situations such as these have a major impact on the lives of those affected and their mere existence is often threatened due to lack of finance to support their needs and their families, coercing them to be indebted or forcing them to sell their precious possessions. This is why advisors usually recommend their clients to create a second source of income i.e. investment.

Investing in Mutual Funds

When we think about investment, the rate of return on investment is the first thing that strikes our brain and the risk factor, along with ROI, is one of the most important elements in making any investment decision. Now, the real question arises as to where should this money be invested into, many of the secured securities such as fixed deposit, bonds usually have a low rate of return accompanied with lesser risk and the securities with a higher rate of return such as shares of a company have a much higher risk component, thereby demonstrating the positive relationship between the risk factors and the gain. Here finding the right balance between the element of risk and adequate rate of return is very essential.

For people who wish to play on the safer side usually invest in debt securities and bonds, whereas people with higher risk appetite usually invest in equities. However, for investors who want to have a comparatively higher return than debt but want moderate risk, are often advised to invest in the latest performing mutual funds. The level of risk in a mutual fund depends on what it invests in. Mutual funds are said to be riskier than bonds but earn more returns on the investment.

So, till here we know that mutual fund is one of the best ways to get good returns on our investments by taking moderate risks. But, knowing how to invest in the best performing mutual funds could be a real hassle for common businessmen and investors.

We, at VSRK wealth creator, are committed to solve all your queries regarding investment and help you to decide the best Investment and course of action for your Wealth Management.

How we can help?

VSRK Wealth Creator is one of the best-known names amongst the leading financial consultants in Delhi. When you opt for our professional services, your investments in mutual funds are operated by our dedicated team of portfolio managers working devotedly along with our with specialized investment research team, to enhance your income on amount invested by allocating the funds into an enormous pool of securities in order to decrease the overall risk to

the minimum level possible and thereby providing you with high returns as well as comparatively low risks.

Being a financial consultant in Delhi, for the past decades, enables our experts to prudently examine various companies, their performances & growth, and after exhaustive analysis of all the necessary factors and elements select the best alternative, amongst the available investment option which is aptly suited to achieve the objective of wealth maximization.

Why Mutual Fund?

We believe in the golden investment adages such as “do not put all your eggs in one basket” and “never test the depth of river with both legs”. Investments in the leading performing mutual funds enable the users to be benefited from the diversification of the amount of investment into various alternatives. Such benefits of diversification were traditionally, available to High Net -worth Individuals (HNIs) who had large amounts to be invested, however investing in the best performing mutual funds provides the investors with such benefits of diversification, and also gives you an opportunity to invest with fewer funds as compared to other avenues in the capital market.

While on one hand wealth is being created, on another hand provides us with an option to en- cash our investment immediately. This helps us to maintain high cash liquidity, which is generally missing in most of the securities such as bonds and fixed deposits and might be of great help in emergencies. Along with all these benefits, the investors can choose from a large list of options to invest in, whether it is in a blue chip company, bond or any other security.

So, it can be concluded that best performing mutual funds are a great source for wealth creation, which provides the investors with comparatively high returns, moderate risks, high liquidity and a diversified option of securities to invest in.

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Month: July 2019

Union Budget and its Effect on MSMEs and Investment Sector

Why in Investment in Latest Performing Mutual Funds a Progressive Choice?

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