ILTS vs. Direct Equity: Choosing the Right Investment Strategy

– ILTS: Lower risk (4%) due to portfolio diversification and hedging strategies. – Direct Equity: High risk (100%) due to exposure to company-specific and market volatility.

Risk:

– ILTS: Offers unlimited returns by tracking overall market movements. – Direct Equity: Potential for high returns depends on individual stock performance but comes with greater risk.

Returns:

– ILTS: Delivers an impressive CAGR of 18%. – Direct Equity: Provides a CAGR of 14% when tracking an index.

Compound Annual Growth Rate (CAGR):

– ILTS: No lock-in period; allows easy entry and exit. – Direct Equity: Also no lock-in period, offering flexibility for investors.

Lock-in Period:

– ILTS: Gains are taxed as Long-Term Capital Gains (LTCG) or business income. – Direct Equity: Taxed under LTCG based on holding period and regulations.

Taxation:

– ILTS: No entry or exit loads, enhancing flexibility. – Direct Equity: Typically no entry load, but exit loads may apply.

Load: