The Plan offers risk mitigation and liquidity with the principal in liquid funds, and growth through the earnings of liquid funds invested in index funds.
There are various investment strategies one needs to use to generate a better risk-adjusted return over the long term. Such strategies depend on the risk profile and goals that one wants to achieve. For those who are unable to build such strategies or combine the potential of different investments, some companies devise their own packages to help investors benefit from them.
Scripbox, an online investment service, has announced the launch of its new Principal Protection and Growth Plan for investors who are looking to grow their wealth while prioritising safety.
The Principal Protection and Growth plan first invest the principal amount in top liquid funds, and then automatically moves the earnings i.e. growth amount of these funds into index funds every month. The Plan offers risk mitigation and liquidity with the principal in liquid funds, and growth through the earnings of liquid funds invested in index funds, allowing users to take advantage of compounding.
By staying invested for just three years, the investor gets indexation benefits on the liquid funds – the tax liability gets reduced due to the inflation-adjusted cost of asset acquisition. What’s more, it offers tax benefits on the index funds too – there won’t be any tax if the gains are less than Rs.1,00,000, and even for gains greater than that amount, the tax rate will only be 10%.
It also provides full flexibility to pause the Plan or withdraw the investment anytime. In essence, this plan provides an excellent alternative to FDs and helps in capital protection along with capital appreciation in the long run.
Scripbox’s announcement is in line with its overall product diversification strategy to offer customers financial plans that align with their requirements and current sentiment towards investing. In the backdrop of the Covid-19 pandemic, the Principal Protection and Growth plan offers investors the safety net and peace of mind to continue to make investments in financial instruments that offer growth while keeping their capital invested safe.
“Covid-19 has heightened the need for better financial planning. With other investment instruments such as FDs, real estate, for example, offering sub-par returns, mutual funds provide better growth options over a longer period. Our new Principal Protection and Growth Plan offer customers an alternative to financial instruments such as FDs as is designed to best protect the principal, taking into account any manner in which equity markets fare during economic downturns. However, our customers also benefit from the advantage of compounding, as their gains get invested in index funds on a monthly basis. This launch is in line with our philosophy to help our customers in wealth creation in a hassle-free way to meet their financial goals,” said Prateek Mehta, Co-Founder of Scripbox.