Long term rates have spiked again and so, in this Prime debt strategy, we tell you which opportunities you should be locking into.
The JP Morgan India inclusion finally happened and with effect from June 28, 2024, Indian G-secs will be included in JP Morgan’s GBI-EM Global Diversified Index. What does this mean and how does it impact you as a debt investor?
We are adding this secured, listed NCD with attractive yields that compensate for the risk which is also mitigated by other factors.
It’s raining high-yield NCDs and this article gives you a framework to filter these to arrive at the best candidates for your portfolio.
This NCD has three tenors and yields offer a good spread over both government and AAA-rated corporate debt.
Odd lots, subordinate bonds, waterfall mechanisms – understand these and other bond market terms
We assess where the rate cycle stands, the FD options you have, and what your FD strategy should now be.
This secured, listed and redeemable NCD is issued by India’s 5th largest microfinance company
With capital gains on debt fund investments now subject to short-term capital gains tax irrespective of holding period, other debt instruments have become quite competitive with debt mutual funds.
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).
The recent furore surrounding the failure of Silicon Valley Bank in the US has exposed that while banking is a favourite sector with stock market investors, the fragility of the banking business is far from well-understood. Banks are held up as the engines of economic growth. Whichever sector grows, the banking sector ultimately gains. Banks are also accorded a higher valuation than most sectors during bull phases. In good times, banks made up a 40% plus weight in our leading stock market indices.
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).
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