INSUBCONTINENT EXCLUSIVE:
in the dynamic asset allocation category.
The fund invests in a mix of equity and debt, changing its allocation between these two asset
classes based on market valuations
When stock valuations are high, these funds reduce exposure to this asset class
It uses the price to book value ratio of stocks to decide its equity allocation.
As market volatility increases, fund managers find it
difficult to generate profits and pay dividends
(distribution), GEPL Capital.
Besides this, distributors point that due to new tax laws, investors have to pay a dividend distribution tax
of 10%, which reduces investor interest.
Many investors have poured money into schemes that paid a monthly dividend between 2015 and 2018 to
Such schemes paid anywhere between 8 and 12% dividend
After April 2018, many distributors have asked investors to shift to systematic withdrawal plans (SWP), wherein they can withdraw a fixed
amount every month, and avoid paying the dividend distribution tax.
