Aarati Krishnan, Author at PrimeInvestor

Insurance

How much life insurance do you need?

One of the very first questions you’ll be faced with after deciding to buy a term insurance plan, is – What’s the size of the term cover (what insurers call the sum assured) you’ll need?

Most folks don’t put much thought into this and go for the nice round number suggested by their insurance agent, which is usually Rs 1 crore. You can online calculators, but they can throw up widely diverging numbers.

Aarati Krishnan May 30, 2023 26 Comments

6 investment styles – which one suits you?

Stocks

6 investment styles – which one suits you?

Apart from the fund manager’s skill, a hidden factor that explains such return differences is the investment styles in which each fund is managed. Right now, many of the funds that have managed to top the charts with a 16% return are value-style funds, while the laggards are growth-oriented ones.

Aarati Krishnan May 25, 2023 13 Comments

4 metrics to choose the best index funds and ETFs

Mutual funds & ETFs

4 Metrics to choose the best index funds and ETFs

“Which equity fund should I buy?” When asked an open-end question like this, most financial experts recommend an index fund. Choosing an index fund is supposed to be far easier than choosing an active fund from the hundreds of schemes. But the number and variety of index funds in India has mushroomed too. There are about 94 open-end equity index funds, while over 120 equity Exchange Traded Funds (ETFs) are listed on the exchanges. So, if you’re thinking of buying an index fund, how do you choose the right one? Here are four metrics to choose the best index funds and ETFs.

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Aarati Krishnan May 4, 2023 No Comments

Stocks

How to build a stock portfolio

If you’re new to stock investing or aren’t quite sure how our stock recommendations fit into your investment plans, we hope this article on constructing a stock portfolio will help you.

Aarati Krishnan May 2, 2023 12 Comments

What has changed with REIT/InvIT taxation

Research Reports

What has changed with REIT/InvIT taxation

For Indian investors looking for regular income with the possibility of capital appreciation, Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) are good vehicles. These entities own a bunch of real estate or infrastructure assets that throw up regular cash flows and distribute over 90% of their cash flows to their investors. As both their income and the value of the real estate or infrastructure portfolio they own can rise over time, REITs and InvITs offer the prospect of rising income with capital gains.

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Aarati Krishnan April 27, 2023 No Comments

Gold

What’s firing up gold prices and what you can do about it

After lying low for a while, gold as an asset class has woken up from its long slumber in the last six months. International gold prices, which fell by 3.3% in 2021 and 0.3% in 2022, have gained 9% so far in 2023 (as of April 11) and are up by 20% in the last six months. In India, gold prices recently bounced off a lifetime high of over Rs 61,000/10 grams, having gained 18% in the last six months. This recent run has made investors sit up and take notice of sovereign gold bonds, gold ETFs and other vehicles to own gold. But should you jump on the bullion bandwagon now?

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Aarati Krishnan April 13, 2023 No Comments

Should you invest in GoI floating rate savings bond?

Bonds & Deposits

Should you invest in GOI floating rate savings bonds?

Debt investors have been so starved of good returns lately, that any return above 7% now seems like a grand prize. This is why, after the government recently announced an interest rate of 7.7% per annum on National Savings Certificates (NSC) for the April-June 2023 quarter, there was much jubilation. Apart from warranting a fresh look at the NSC itself, this rate hike promises to significantly lift returns on a Central government-backed instrument – GOI Floating Rate Savings Bonds 2020 (GOI FRSB).

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Aarati Krishnan April 4, 2023 No Comments

Low returns from debt funds? know how to manage this risk

Mutual funds & ETFs

Low returns from debt funds? Know how to manage this risk!

Low returns from debt funds? Know how to manage this risk!
After Silicon Valley Bank revealed large losses on its US bond portfolio that had eaten into its capital, there’s been a lot of social media outrage. Some folks are shocked that banks can make losses on a cast-iron investment such as US treasuries. Others seem to be appalled that Silicon Valley Bank is not alone and that many other global banks are in the same boat. This shows that investors at large have only a vague understanding of what rising interest rates do to bond portfolios.
You have also been bombarding us with questions on how interest rate risks can play out for debt funds, particularly target maturity, constant maturity and gilt funds. We try to address them here.

Aarati Krishnan March 23, 2023 9 Comments

NFO review: IDFC US Treasury Bond 0-1 year Fund of Funds

Mutual funds & ETFs

NFO review: IDFC US Treasury Bond 0-1 year Fund of Funds

US stocks and US equity funds have been quite a hit with Indian investors in recent years. Indians invest in these funds to gain exposure to global businesses (Amazon, Alphabet, Mastercard etc). More importantly, they would like to gain an exposure to the US dollar which has appreciated steadily against the Rupee over the years.
But the risks in owning US equities have become apparent lately, with the Fed on a rate hiking spree and the US economy flirting with a recession. US stock indices have lost 12-15% in one year, while US equity funds have seen losses of 6%-12%. But there has been a sharp rise in yields on US government bonds (treasuries).

Aarati Krishnan March 2, 2023 5 Comments

Adani stocks and index funds: cause for concern?

Commentary

Adani stocks and index funds: cause for concern?

After the Hindenburg bombshell tanked Adani stocks, the faith that some investors placed in index investing seems to have been shaken. With the Nifty 50 and Nifty Next 50 featuring seven Adani group stocks between them, PrimeInvestor received many queries soon after the news broke.

Aarati Krishnan February 23, 2023 13 Comments

Should you go for the 4-5 year special deposit schemes from NBFCs now?

Bonds & Deposits

Should you go for the 4-5-year special deposit schemes from NBFCs now?

With popular NBFCs such as Sundaram Finance, HDFC and Bajaj Finance revising their deposit rates in the past year, FD investors can finally look forward to better returns, after a long drought. Rising demand for loans in an improving economy, is forcing NBFCs to compete actively for deposits once again, prompting even top-rated ones to roll out deposit schemes for longer tenures of 4 to 5 years with ‘special’ rates. Sundaram Home Finance is offering 7.65% on its 4-year FD and HDFC has a special offer of 7.6% running its 45-month Sapphire Deposit scheme.
But are these rates special enough for you to lock in your money for longer tenures of 4 or 5 years?

Aarati Krishnan January 29, 2023 6 Comments

Mutual funds & ETFs

5 reasons to avoid PSU ETFs

The list of top performing equity funds for the past year features a couple of unusual entries. With a return of 18-21 per cent, CPSE ETF (managed by Nippon India Mutual Fund for the government of India) and the Bharat 22 ETF (managed by ICICI Prudential Mutual Fund) are top rankers among equity funds.
This has many investors asking if they should add these passive funds to their portfolio. The portfolios of CPSE and Bharat 22 ETFs are made up of the PSU oil, energy and financial giants which are the flavour of the season. These ETFs’ costs are ultra-low because they are used as divestment vehicles. Both ETFs would also seem to be ‘value buys’ if you go by their ultra-cheap valuations. The CPSE ETF trades at a portfolio PE of 7 times and Bharat 22 ETF at about 11 times. This is a fraction of the current Nifty50 PE at over 21 times.
But does this make them worth betting on? There are five good reasons for long-term stock investors to steer clear of these ETFs.

Aarati Krishnan January 17, 2023 5 Comments

How much life insurance do you need?

6 investment styles – which one suits you?

4 Metrics to choose the best index funds and ETFs

How to build a stock portfolio

What has changed with REIT/InvIT taxation

What’s firing up gold prices and what you can do about it

Should you invest in GOI floating rate savings bonds?

Low returns from debt funds? Know how to manage this risk!

NFO review: IDFC US Treasury Bond 0-1 year Fund of Funds

Adani stocks and index funds: cause for concern?

Should you go for the 4-5-year special deposit schemes from NBFCs now?

5 reasons to avoid PSU ETFs

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