Skip to main content

Debt Mutual Fund Investors - Good days ahead

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

Debt fund investors Good days ahead



These funds have done well in recent times. If inflation is curbed and RBI cuts rates, you can expect good returns

Stocks have been in the spotlight following the BJP's landslide victory in the general elections. But even the debt securities have not done badly . In the past 3-6 months, debt funds have delivered handsome returns. A few long-term gilt funds have given more than 6% returns. That's nearly 25% returns on an annualized basis. This spectacular performance comes after a year of poor returns. The rise in bond yields have led the same long-term gilt funds to give very poor returns in the past one year.

But good news may be in store for investors if policy initiatives of the new government bear fruit. Experts say if inflation is contained, they expect the RBI to cut interest rates. I would expect the new government's policies to drive down interest rates and, therefore, yields may come off by 100 bps in the next 12-18 months. If interest rates are cut, the value of the bonds in the portfolios of debt funds goes up, driving up their NAVs. Not everyone is so optimistic though.


Interest rates are not yet conducive to support a turnaround in the investment cycle.
These will eventually come off, but there is still some time away An extended pause in interest rates is likely, as there are still looming concerns over inflation and a weak monsoon.

Interest rate scenario If the various bottlenecks in the Indian economy are addressed, the growth scenario is likely to improve. However, experts reckon that it will take some time for the economy to open up. And, more importantly, interest rates will play a major role in shaping this recovery . Interest rates are still at elevated levels.


However, if things fall in place, as expected, a downward trajectory in the country's interest rates will be a reality soon. If the new government takes the path towards fiscal consolidation and the inflation figure is also supportive, then the central bank will surely start slashing the key policy rates. There will be a near 100 basis points cut in rates until the end of this financial year (March 2015). The bond market has priced in the improvement in the current account deficit situation as of now. At current yields of around 8.8%, most of the bad news has been priced in, but hardly any of the good news has been factored in


Opportunity in debt funds This presents a big opportunity for debt fund investors. If investors choose wisely, debt funds could yield 9-10% returns in the coming year. The gains will be particularly strong in long duration bonds, which are more sensitive to interest rate changes. Long duration is where the action will take place.


The maximum capital gains will come through this basket when interest rates come off. We are overweight in the longer duration instruments from a medium to long-term perspective Investors could, therefore, start taking positions in income funds and even gilt funds, if they are looking to invest for a 12-18-month period. However, for those looking at a time frame of less than a year, these funds may not be the best bet. If interest rates remain elevated for a prolonged time, then, obviously, long duration instruments will take a hit. Shorter duration accrual funds should find favour for the time being as these exhibit lower volatility and are less sensitive to rate changes. She says investors with a shorter investing time horizon should remain in short-term debt funds, while those willing to withstand higher volatility could opt for long-duration funds.


While the former will give stable returns, the latter could prove to be very volatile due to the changes in the interest rate scenario.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund

2.Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

JP Morgan launches Emerging Markets Opportunities Equity Offshore Fund

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 JP Morgan launches Emerging Markets Opportunities Equity Offshore Fund    The new fund offer opens for subscription on 16 th June and closes on 30 th June. JP Morgan Mutual Fund today announced the launch of its open end fund of fund called Emerging Markets Opportunities Equity Offshore Fund. The fund will invest in an aggressively managed portfolio of emerging market companies in the underlying fund - JPMorgan Funds - Emerging Markets Opportunities Fund, says a JP Morgan press release. Noriko Kuroki, Client Portfolio Manager, Global Emerging Markets Team (Singapore), JPMAM said, "Emerging markets have been out of favour for several years, as growth decelerated and earnings struggled. However, in a world of globalisation, we believe that EM will eventually re-couple with DM, leading to the long-aw...

Nifty F&O

  1. What is a straddle? A strategy using Nifty options usually before a major event or when one is uncertain of market direction. Comprises purchase of a Nifty call and put option of the same strike price. Usually strikes are purchased closer to the level of the underlying index. 2. What is better ­ buying or selling a straddle? It depends.Implied volatili ty of options, or near-term expectations of price swings in an un derlier like Nifty , usually peaks before an event and falls when the outcome plays out ­ like Infy re sults in past years. However, once the event plays out, a sharp rise or fall in Nifty could result in price of the straddle rising ­ benefiting buy ers. But, normally , those who sell or write options charge hefty premiums from buyers in the hope that fall in volatility would ensure the options end out-of-the-money, hurting buyers. 3. So, do straddle sellers end up winning most of the time? Yes. That's invariably the case when market volatility is trending on the...

L&T Long Term Infrastructure Bond 2012 Tranche 2 Application Forms

Application form for Tax Saving Long Term Infrastructure Bond     L&T Long Term Infra Bond Application form     Submit filled up application     Collection canter near you     --------------------------------------------- Invest Tax Saving Mutual Funds Online Mutual Funds Online   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   ---------------------------------------------   How to apply to PFC Bonds? Apply for PFC Tax Free Bonds forms below Download PFC TAX Free Bond Application Forms Submit the filled up form to Collection canter near you How to apply to NHAI Bonds? You can download the NHAI Tax Free Bonds forms below Download NHAI Tax Free bond Application Forms Submit the filled up form to Collection canter near you        

Changing the scheme preference in NPS

The NPS allows subscribers to choose the pension fund schemes in which they would like their contributions to be invested, as well as the pension fund manager who will manage their money. Subscribers can indicate their preference by mentioning the ratio in which their contribution will be invested in equity, corporate bonds and government bonds. They can also change this preference if they wish to do so. Here's how to go about it. Active vs auto As an alternative to choosing fund schemes, the NPS offers an auto choice where the proportions are pre-decided based on the age of the subscriber. The ratios cannot be modified in the auto choice, without changing the mode to active. Corporate If the subscriber is investing in the NPS through his corporate employer, the employer should offer all the options that the subscribers can choose from to change their preference. Physical form A form, UOS-S3CS-S3, has to be filled in and submitted to the PoP-SP through which the NPS account was ope...

UTI Equity Fund Invest Online

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   UTI Equity Fund   Invest Online UTI Equity is a large cap-oriented fund with assets under management worth Rs. 2,269 crore (as on June 30, 2013). The fund was originally launched in May 1992 as UTI Mastergain and is benchmarked against S&P BSE 100. A couple of years back the name of the fund was changed to UTI Equity Fund and many of the smaller funds of UTI were merged into this fund. Performance The fund has outperformed its benchmark as well as the equity diversified category average in the last one-, three- and five-year periods. It has repeated the same in 2013 (as on May 31). Since its inception the fund has delivered an impressive 26 per cent compounded annual growth rate which is superior to its benchmark performance in the same period. Y...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now