Should you go for the 4-5 year special deposit schemes from NBFCs now?
Bonds & Deposits
Aarati Krishnan

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?

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5 reasons to avoid PSU ETFs
Mutual funds & ETFs
Aarati Krishnan

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.

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Prime Debt outlook 2023: Handling a rate pause
Bonds & Deposits
Aarati Krishnan

Prime Debt outlook 2023: Handling a rate pause

After bungee jumping off a cliff, it is good to wait for the adrenaline rush to wear off. Indian bond markets are in exactly this situation now. After falling sharply as rates rose, bond prices are pausing to take a breath. In our debt outlook last year we expected rates to continue their upward climb and recommended strategies to play this. During the course of 2023, we think interest rates could top out and stabilise. We tell you what this will mean for your debt portfolio.

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Why you shouldn’t fall for ESG pitches
General
Aarati Krishnan

Why you shouldn’t fall for ESG pitches

“Why are the so-called expert investors in India so disinterested in ESG funds?”. A young investor asked me this question at a recent event and it gave me food for thought. It is true that at PrimeInvestor, we are not fans of ESG investing either. We don’t go out of our way to cover ESG funds or ‘green’ bonds and deposits, unless they offer great returns. 

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An AT1 Bond with high yield
Bonds & Deposits
Aarati Krishnan

Prime Bond recommendation: An AT1 bond with high yield

At PrimeInvestor, we took an ultra-conservative approach to debt investments during Covid and just after it. But with economic recovery taking root, interest rates rising and credit offtake improving, we believe investors can shoot for higher yields by taking on some credit risk. Perpetual bonds from banks with sound financials are one option, offering good reward for risks taken. We are covering one such bond here.

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Re-rating: The X factor in multi-bagger returns
Stocks
Aarati Krishnan

Re-rating: The X factor in multi-bagger returns

Ask any new CFA pass-out what drives stock returns in the long run and he’ll likely tell you that is earnings, of course! Equity analysts spend many man (and woman) hours on excel sheets, trying to model the future earnings of companies, to identify stocks to bet on.
But if you look at the journey of multi-bagger stocks over any time period, you’ll find that there’s an X factor apart from earnings that drives multi-bagger returns.

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An active strategy for fixed deposits
Bonds & Deposits
Aarati Krishnan

An active strategy for fixed deposits

It is the fashion for personal finance gurus and social media influencers to begin their talks by dissing FDs. FDs are dumb investments, they say, before urging you to migrate to equities, or exotic things like options trading or covered bonds.
But the humble fixed deposit can serve a very useful purpose in your portfolio by acting as a source of ready liquidity and acting as a bedrock for your safe money. That’s why we have Prime Deposits, our list of FD recommendations. It is quite possible to generate positive real returns on your FDs through an active strategy. But can an active strategy really go with FDs? Of course! Here’s how you can do it.

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Employees' Pension Scheme (EPS) and the SC verdict
General
Aarati Krishnan

Employees’ Pension Scheme and the SC verdict – Your questions answered

A recent Supreme Court ruling about the Employees’ Pension Scheme has put personal finance writers in a tizzy. Most have tried to decipher the complicated ruling. Some have tried to tell eligible employees what they can still do to board the EPS bus if they’ve missed it so far. But after studying the ruling and its implications, we felt you needn’t worry over-much about the EPS if you have missed the bus. There are many other good pension options.  

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Are SDLs safe? And other questions
Bonds & Deposits
Aarati Krishnan

Are SDLs safe? And other questions

Whenever we recommend SDLs, our readers raise many queries like “Are SDLs safe?” and more about the difficulty of choosing them. In this FAQ, we try and address all of your niggling doubts about SDLs.

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NHIT NCD - Five reasons to skip the NCD
Bonds & Deposits
Aarati Krishnan

Should you invest in NHIT’s NCD offer?

With interest rates on fixed income options hitting rock-bottom in recent years, debt investors have been starved for reasonable yields. This is perhaps why the issue of Non-Convertible Debentures (NCDs) from National Highways Infra Trust (NHIT NCD), offering a yield which is a tad over 8%, is seeing such enthusiastic reception from investors, bond platforms and some advisors too. 

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short term money
Bonds & Deposits
Aarati Krishnan

Have short term money to park? Here’s a cast iron option

Lately, it is not just India’s stock market that has been hopping all over the place like an impatient child. The bond market has been doing it too! India’s 10-year government bond yield, which sets the benchmark for all other debt instruments, climbed vertically from 5.8% in July 2020 to 7.61% in June 2022. But after that, it has been unable to make up its mind on whether to climb higher or pause for breath. 

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Is it time to invest in US equities?
Markets
Aarati Krishnan

Is it time to invest in US equities?

US stock indices have started a fresh bout of declines. This has led smart investors to ask if they should be bargain-hunting US equities at this juncture. The answer depends on where the US economy and earnings are heading.

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