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Whether liquid funds are a good option for building emergency corpus?

Liquid funds in India, as the name suggests are liquid. This means they can be easily converted from invested money into useable money. They have minimum 7 day’s of exit load. .

Before focusing on why to use liquid funds in India for emergency corpus, let’s focus on how to build an emergency fund.

Examine your Cash Flow:
First and foremost, check if can maintain the income which meets your monthly expenditure or basic needs. Due to pandemic-induced economic deceleration, salary cuts and business losses have affected the majority of the population throughout the world. If you have a surplus left after meeting your emergency corpus, you may then consider investing money.

Understand your risk-taking ability:
Before you invest your money, gauge your risk taking abilities. If you are an investor reaching your retirement, then you might want to take a conservative stand. This means holding a bigger emergency corpus, say 24-36 months equivalent of expenses into a liquid mutual fund. Liquid fund returns may be lesser compared to a longer-term debt fund or other funds such as equity mutual funds, however, they can serve the main purpose of an emergency fund; which is offering you safety and liquidity at the time of need.

When selecting the liquid funds to invest in, note that the focus should not be on return but the safety and liquidity aspect, especially if you are building emergency funds.

Liquid Funds may not vary a great deal in returns. Invest in liquid funds which invest completely in short-term government securities of not exceeding 91 days and have no private party risks. Due to the short maturity period, they are not subject to volatility in interest rate fluctuations.

Liquid funds taxation is as per the holding period. For short term capital gains of lesser than three years, the gains are taxed as per the income tax slab of the investor. For long-term capital gains exceeding three years, liquid funds are taxed as per 20% with indexation benefit.

Traits of Liquid Funds in India that makes them an excellent choice for the Emergency fund:

Liquidity:
Liquid funds can be easily converted to useable money. They can be easily redeemed and in just T +1 time the money gets credited to your account.

Risk:
Liquid funds are less risky as compared to equity mutual funds. This helps to minimize the downside risk of your investments due to from market volatility to a certain extent.

Last but not the least, always choose mutual funds to create the emergency corpus you desire as the Mutual Fund industry is managed by professionals and regulated by SEBI..

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Orally Dissolving Pharmaceutical Drugs – The Future of 2021

Orally Dissolving Pharmaceutical Drugs

December 1, 2019 – a day that will be remembered in history when Corona (COVID-19) was first identified.

It is nearing the end of 2020 and we are still working on successful clinical trials of any drug or vaccine for COVID-19. Experts have claimed that the vaccine might require a year or two to be successfully formulated and administered to the global population at large.

This situation brings with itself a bigger problem – that of administering the vaccine.

As we are already aware, COVID-19 is extremely contagious and can be easily transferred from one person to another through surface contact, it makes sense to be skeptical of the current existing modes of drug administration, almost all of which require some sort of surface contact with a non-organic material (syringes, droppers, etc.).

How should we tackle this simple, yet unavoidable, dilemma?

The answer might not have been that simple a decade ago, but today we indeed have a seamless solution for this problem – Oral Thin Films.

Oral Thin Films (OTFs) are polymeric films designed to deliver therapeutic elements into the oral cavity or the gastrointestinal (GI) tract, where they are absorbed and routed to the circulatory system directly. As such, OTFs can rapidly deliver hydrophilic as well as hydrophobic active compounds.

Types of OTF

There are two types of Oral Thin Films:

OROMUCOSAL

This type of thin film is characterised by its ability to stick to the oral cavity while slowly releasing the drug into the patient’s systemic circulation. The medication enters the patient’s bloodstream directly and can thus be transported to the target organ faster.

ORODISPERSIBLE

In contrast to the previous type, this type of film is characterised by its instant breakdown immediately upon coming into contact with the patient’s saliva. These can be further sub-classified into two types: Orally Disintegrating & Orally Dissolving.

Orally Disintegrating disintegrate in the mouth upon contact with saliva, then dissolve and get absorbed in the gastro-intestinal tract (a method highly effective to transport hydrophobic drug compounds that would otherwise be very difficult to be dissolved and absorbed into the body through other conventional methods).

Orally Dissolving disintegrate and dissolve simultaneously into the saliva (more appropriate for water-soluble compounds that are easier to be absorbed into the body).

Some More Benefits of Using Orally Dissolving Pharmaceutical Drugs

1. Precision

Since the films can be directly absorbed through one of the methods described above, it makes it easier to have a precise dose that can be altered depending upon the target patient. For example, in the case of dealing with children, who need a smaller dosage compared to adults, the same film can be altered to a lower dosage.

2. Easier Manufacturing

These films are developed using powderless and aqueous-based processes that do not use solvents. This not only helps in accelerating the manufacturing process but also makes the process seamless, ultimately saving on time and cost.

3. Customization

The drug delivery system through OTFs is an ideal option for patients as they do not need to chew, swallow, or use water to ingest the drug. Furthermore, the films are highly customisable and can have flavors and colors added to them to make them more palatable.

Following the above-mentioned discussion, one can only appreciate the effectiveness, ease of manufacture, and customisability of this relatively new method of drug administration. Oral Thin Films are expected to ensure a seamless, more efficient, and hassle-free future in medication.

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How to do tax-saving with mutual fund investments?

It might be difficult watch your hard earned savings simply getting deducted in taxes. The simplest thing to do would be to invest in a tax saving mutual fund, which helps you build wealth and reduce your tax liability. Remember though tax planning is challenging, it can also be rewarding if done correctly. So, we are giving you a quick run through about how you can save your hard earned money by investing in a Tax Saving (ELSS) mutual fund scheme.

An ELSS (Equity Linked Saving Scheme) could become you best choice if you are looking for:

Tax benefit u/s section 80C of the Income Tax Act, 1961
Opportunity to invest in the equity markets to grow your investment corpus
Long term Capital appreciation
Shortest lock-in period as compared to other tax saving instruments under Section 80C

As per SEBI’s categorization norms for mutual funds, ELSS is an open-ended equity-oriented mutual fund scheme that invests a minimum 80% of its assets in equity & equity related instruments.

Generally investment objective of an ELSS tax saving mutual funds is to achieve long-term capital appreciation by investing primarily in equity and equity-related instruments.

A distinctive feature about ELSS is that compared to the other open-ended diversified equity mutual funds, investment in ELSS is subject to a compulsory lock-in period of three years. During this period, you cannot redeem your investments before the completion of three years from the date of the investment. After the lock-in, if you decide to redeem the investment on the realized gain, as per the current tax rules, LTCG (Long-term capital gains) tax applies.

Remember, though tax saving may be a major purpose behind investment in tax saving mutual fund; it’s a general expectation that any investment should also deliver some return. Hence, while evaluating your options for the tax saving mutual funds of 2021 to invest in, you need to look at the return column too. Do not forget that as an investor, should know the risk- reward tradeoff specific to an investment before taking the plunge with your hard earning money. You need to look beyond to see a historical growth of ELSS tax saving mutual funds for a period of at least 3 years.

If you are looking to save tax, lower your capital gains tax and long term risk adjusted returns from your investments, maybe you should consider adding an ELSS tax saving mutual fund to your portfolio.

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