Thanks to Patanjali boom and Pakistan terrorism, there is a common theme growing in general public about avoiding chinese products and buy “Desi”. This is easier said than done. But we will definitely more curious on what we are and will be making in India than ever.
Gold is an important asset class, don’t miss it in your portfolio
Fixed Income funds should be part of your portfolio
As usual, once the redemption pressure comes, suddenly a hot cake fund/ category becomes stale and out dated, same thing is happening with the fixed income fund category. Before making these odd judgments with half knowledge, we must look at what prompted the outflow, take away and the opportunities ahead.
Key take away –
1. Unlike equity mutual funds, where we talk about SIP and staying invested for a long term, debt funds/fixed income funds considered for short -medium term and the funds see an upsurge in returns in the falling interest rate scenario.
2.Series of rate cuts by #RBI over last 2 years, the long term debt funds, medium term short term debt funds saw big upswing, giving investors handsome returns, and the chances for further rate cuts may not be aggressive as last few quarters hence it’s wise to book profits. And wise investors did so.
3. There is no panic situation in the debt fund category just because guilt funds, long term debt funds saw redemption. Investors are parking their money in credit opportunities fund (category – you can find in moneycontrol. Mutual funds section)
What is credit opportunities funds? Why should I invest?
Credit opportunities fund is a category within the fixed income funds, investing in high credit quality corporate bonds by mostly non financial companies which offer higher returns compared to the g-sec, tax free bonds, government entities.
A good mutual fund company with a strong compliance team would invest in companies with high credit rating papers ntssuch as AAA or AA, will ensure asset backing for the debt. These funds also come in brackets of short term, long term category depending on the tenor of the debt investments,there are about 57 credit opportunities funds in the list however with a basic research would easily guide is on which tenor funds we should look at this point in time.
Mutual funds companies like ICICI PRU, Franklin Templeton, DSP BR are my personal favorites because of their meticulous processes. Don’t go by past returns of the funds, higher returns could also mean higher risks fund manager might have taken deviating from the mandate and could lead to extreme volatility in returns.
By no mean I am saying put all your cash in this instrument, every instrument comes with its own set of risks, so do corporate debts. These debts run higher credit risk, market risk and liquidity risk. All I am saying is debt funds are not a high and dry category and investors can look at allocating some portion of their investments in these funds to see some upside compared to bank FDs.
Check the list of funds for reference-
http://googleweblight.com/?lite_url=http://www.moneycontrol.com/mutual-funds/performance-tracker/returns/credit-opportunities-funds.html&ei=3r0p83CD&lc=en-IN&s=1&m=970&host=www.google.co.in&ts=1476723583&sig=AF9NedkoAQaVyGxfhovCj-LhqrxO8Mscbg
TOP NRI Investments in India – FCNR deposits
TOP NRI Investments in India – FCNR deposits
With dwindling interest rates globally, it has become impossible to earn any interest in the fixed income category, however, #NRI investors have various options available back in their own country for earning a good fixed return on their investments. There are options of NRE, NRO accounts for savings, fixed deposits and recurring deposits, which are in the indian currency, #FCNR is one more option available which offers lower interest compared to #NRE, #NRO accounts, however, protects the investor from currency fluctuation risk.
There is been news of negative yield for last three months in many major countries worldwide, Negative-Yielding Bonds Jump to Almost $12 Trillion – Bloomberg,
NRI investment patterns become realistic – source – moneycontrol
What NRIs want
Ground realities
NRI preferences in home buying 95% NRIs are employees and wage earners and cannot afford luxury property in India. Rich NRIs have burnt their fingers or have learnt from the bitter experiences of theirpeers and hence, avoid luxury properties. Small-ticket investments, provide easier options for exit and better rental returns. Insecurity in the global job market, is forcing NRIs to be realistic in their housing investments, back home.