General

What is Long Term Equity Fund? How is it different than other types of mutual funds?

Long Term Equity Fund or LTF is a type of mutual fund that invests on common stocks registered on the stock exchange. It has a basic foundation of at least 65% of the fund’s net asset value in a fiscal year, including investment in securities, cash deposits, hybrid instruments, other assets and means to generate profits as regulated by Securities and Exchange Commission. Investors who interested in investing in this type of fund must prepare for the risk associated with a long-term investment and market fluctuations. Long-term equit funds have special characteristics as the followings:

1. Investment in long-term mutual funds are tax exempted to the end of 2016


2. Unit holders’ capital from 2017-2021 cannot be used to deduct personal income taxes and capital gains are subjected to taxation

Are all types of mutual funds eligible for tax exemption?

The mutual funds which are tax exempted are Long-Term Equity Fund (LTF) and Retirement Mutual Fund (RMF). Both mutual funds are suitable for investors with personal incomes which could be invested for tax benefits (The personal incomes in this case means “assessable income”, excluding corporates, non-juristic persons and unallocated estates).


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