Horizon smallcases are goal-based portfolios, created to help you invest towards monetary goals that you would like to achieve by a predefined year. They are a collection of various asset classes like stocks, golds, bonds, etc. Currently, there are 6 Horizon smallcases starting from 2030 to 2055, with a gap of 5 years between each of them. Horizon tries to achieve the best possible outcome, based on the investment capacity of the investor. It focuses on generating wealth in the first few years & as the target year is nearing, it shifts to conservative investment options. This helps reduce risk while the investor is close to their goal year.

Horizon invests in different asset classes with the help of ETFs — which are baskets of securities that track an underlying index (Nifty, Gold, etc) and can be bought and sold on the exchange. For example, a Nifty Index consists of 50 stocks. So if one wants to invest in the Nifty index, one can just buy the Nifty ETF, instead of buying all the 50 stocks in the same proportion as the Index. If the Nifty generates a return of 5%, the Nifty ETF will also generate approximately the same return. Similarly, investing in a gold ETF will allow investors to earn returns on investing in physical gold.

Once you have charted out what your goal is and the year by which you would like to achieve it, you can choose a Horizon smallcase that is closest to the year you set for your goals.

Horizon smallcases are created for anyone with long-term financial goals. If you have goals that you would like to achieve within a pre-defined year and an absolute part of your life, these are your ideal match. Goals like retirement, higher education or marriage funds for children, or other goals that have an almost fixed timeline attached to them are some examples that were considered while creating these portfolios.

There are no lock-ins. You have the freedom to exit these smallcases whenever you’d like. However, they perform their best if you stay put till you reach the goal year.

Horizon portfolios are rebalanced once a year. You will be notified every time your portfolio needs to be rebalanced. You can also keep an eye on the past & future rebalances of this smallcase.

All the ETFs in Horizon smallcases have their own tax implications:

• For a corporate bond fund with less than three years, you must pay short-term capital gains tax (STCG) based on your tax slab. On the other hand, for those who hold the bond for more than three years, 20% tax on long-term capital gains is applicable.
• Fixed Income ETF (LIQUIDBEES) are taxed under DDT.
• Equity ETF (NIFTYBEES) will be taxed like other equity instruments - 15% tax on short-term gains & 10% tax on long-term gains over Rs 1 lakh
• Gold ETF tax falls under short-term (added to tax slab) and long-term which is at 20% with indexation benefits.