Active Asset Allocator Long-short Mutual Funds

If you are an investor looking for an investment avenue that manages market volatility along with growth opportunities? Active Asset Allocator Long Short Mutual Fund can be the best choice for you. These mutual funds follow a specific investment strategy that uses a blend of long and short positions in order to reduce market volatility and enhance portfolio performance.

What are Active Asset Allocator Long Short Mutual Funds?

Active asset allocator long short mutual funds are specialised funds that aim to adjust market risk by taking long and short positions together based on the market conditions. These mutual funds make investments in different asset classes such as equities and debt instruments while using long and short strategies.

• Long Position: The fund manager buys those stocks which are expected to increase.
• Short Position: The fund manager sells stocks that are expected to fall in order to eliminate market risk.

The allocation between equities, debt and hedge position depends on the market conditions.

Features of Active Asset Allocator Long Short Mutual Fund

• Active Asset Allocation: The fund manager analyses the market trends on an ongoing basis and revised the assets allocation between equities, debt, and cash.
• Long and Short Approach: The funds buy stocks that are likely to do well for the future and hedge against any risks that may arise from market downturns.
• Effective Risk Management: Through long and short strategy, these funds aim to minimise risk arising from market fluctuation.
• Professional Fund Management: The fund managers follow the markets and consider economic trends and business performance before making their investment decisions.

How to Invest in Active Asset Allocator Long Short Mutual Funds?

You can invest in active asset allocator long short mutual funds by following simple process:

Step 1: Choose investment mode. You can invest through:

• AMC websites
• Online investment platforms provided by stockbrokers
• Mutual fund distributors

Step 2: Choose a suitable active asset allocator long short mutual fund.

Step 3: Choose between Systematic Investment Plan (SIP) and Lump sum based on your goal and make investment.

Step 4: Make payment through UPI, netbanking or other available methods.

Why to Invest in Active Asset Allocator Long Short Mutual Funds?

• Reduction in Market Volatility: This strategy reduces the effects of market downturns in comparison to pure equity investments.
• Diversification: These types of funds make investments in various types of asset classes that help diversify the portfolio risk.
• Consistent Returns: Consistent returns may not be guaranteed due to risks involved but the asset allocation strategy and hedging aim to produce consistent returns over time.
• Medium to Long Term Investors: Such types of funds are useful for medium to long-term investment goals including wealth creation.

Taxation of Active Asset Allocator Long Short Mutual Funds

• Equity Exposure of 65% or More: Treated as equity-based fund. STCG is taxed @ 20% (in case holding period is up to 12 months), whereas LTCG is taxed @ 12.5% post 12 months. Equity LTCG not exceeding ₹1.25 lakh annually is exempted from taxation..
• Equity Exposure Between 35% and 65%: Hybrid Fund is treated as a non-equity fund. STCG is taxed based on applicable income tax slab (in case holding period is up to 24 months), whereas LTCG is taxed @ 12.5% after 24 months (no indexation benefit).
• Equity Exposure of 35% or Less: Mutual Fund is treated as specified mutual fund. Entire capital gain would be taxed as STCG as per applicable income tax slab rate irrespective of the holding period.