Category Archive Crypto Press Release

Diem is a cryptocurrency developed on blockchain technology. It is launched by the most popular social media giant Facebook. The main motto behind shaping Diem is to empower millions of unbanked and under banked people by giving them equal financial opportunities and to bring everyone on to a single financial platform.

Diem, will help you in faster and quicker transactions, one can experience the lightning transaction with minimal or no charges. You can sit in your home and transfer money to another person who is in the other part of the world. And to this, all you need is a mobile with data connectivity.

Diem is developed on Blockchain technology, it is a decentralized programmable database that helps in backing the more stable currency, that will have the capability to become the medium of exchange for transacting money to millions of people around the world.

Diem is an independent association, it is a non-profit organization running with a vision to provide basic financial infrastructure and global currency to emancipate millions of people. Libra Association is formed by the compilation of validator nodes, mostly they are academic entities, international corporations, and social impact partners.

The Diem Blockchain is an assigned system that supervises exchange and ownership of Libra. In the process of transacting Libra, there is a slight chance of attacks on the system and here Blockchain helps in defending attacks using LibraBFT.

A perfectly developed and secured software is a must to protect the Diem Blockchain. A new programming language called MOVE is used in Diem. It is a safe and reliable programming language for Libra Blockchain. It is a sensible bytecode language used to implement smart transactions and smart contracts.

Diem is definitely a game changer in the field of cryptocurrency as it is backed by a stable reserve, there is no need of worrying about the fluctuations in the value of the Diem.

Mrbtc.org comes with an interesting infographic on Diem Cryptocurrency, checkout the following infographic and lets us know your feedback on it.

Note: Facebook changed its cryptocurrency project name from Libra Coin to Diem Association. Diem (formerly known as Libra) is digital currency by the American social media company Facebook, Inc. – Wikipedia

During the past several years, the traditional Investment Management (IM) industry has seen rapid changes with the appearance of well-funded fintech companies, the digital tsunami and the shifting of demographics. Many upcoming finance preferred ecosystem that leverages the digital capabilities in order to provide excellent investment opportunity for the private, retail, and institutional investors. It uses advanced technologies like AI, machine learning, and Robo-advisory to offer a complete 360-degree view of the private and institutional portfolio to the users of the ecosystem.

Coming back to traditional investment methods in the IM industry, it is observed that the traditional investment methods like mutual funds and hedge funds do not guarantee an excellent return to investors due to limited investment opportunities and larger capital requirements. In the recent past, investing in mutual funds has also been considered as expensive by IM industry experts that is largely considered as an anachronistic ETF.

In the cryptocurrency space too, the investors are looking to invest in digital crypto funds that offer high returns with minimum market risk. In order to help investors, modern fintech players are planning to provide active portfolio management capabilities in a ready turn-key ecosystem featured by modern technologies such as Artificial Intelligence (A.I)/Robotics.

Despite rapid changes in the IM industry, it is important for the investors (i.e. private, retail and institutional) to obtain proper knowledge regarding the difference between types of funds in terms of risk, return, tax treatment, and investment opportunity.

Here are the category-wise differences between three major funds, which include equity funds, hybrid fund, and debt funds.

Investment Risk

When it comes to investment risk, the equity funds come on top with a high-risk rating in comparison to debt and hybrid funds. Equity funds are the ones that primarily invest in stocks. In equity funds also, the risk varies in sub-categories. For instance, mid-cap and small-cap are riskier than the diversified large-cap funds.

The lowest risk credit in the equity category goes to index funds, which passively tracks the index. On the other hand, in the debt category, the risk rating is mainly determined by maturity and credit quality. Debt funds primarily invest in different securities like Treasury bills. High maturity generally incurs high risk in debt funds. Lastly, in the hybrid category (debt and equity both), the riskiest category is the balanced funds as it has a greater than 50% exposure to equity.

Return Scale

In obvious terms, it can be simply stated that the returns expected on each type of fund are generally proportional to the risk taken by the investor. One thing that affects this relationship between risk and return is Total Expense Ratio (TER). TER, in simple terms, can be defined as the total cost that incurs to the investor for managing and operating any fund like a mutual fund.

The level of TER varies with active management of funds by the investor. Talking about three different funds, the closely ended and liquid funds have a low TER in debt category, whereas in the equity category, diversified and sectoral funds have high TER and high expense ratio. In the hybrid category, arbitrage funds are largely passive in nature, hence have low TER, whereas the balanced funds have high TER close of 2.5 percent.

Apart from TER, the choice between regular and direct plan also affects the NAV to investors, and as a result, overall return also gets affected.

Keeping this in mind low TER would be the best choice for investors to have a high return in the alpha markets.

Taxation Scale

Talking about taxation, there are broadly two categories, dividends and capital gains, on which taxation scheme of things gets imposed. In the case of dividends, the capital earned is tax-free and is directly handed to investors in case of debt, equity, and balanced funds. However, the Dividend Distribution Tax (DDT) generally varies in each category. For equity, DDT is 10%, whereas the debt category has a much higher DDT of 25%.