PrimeInvestor - Articles and Reports

US Yield
Bonds & Deposits
Aarati Krishnan

What you should do about the US bond yield spike

Suddenly everyoneโ€™s talking about US bond yields surging. I see that the 10-year US government security is up by some 0.02 % to 1.57%. Why is this such a big deal?
While yesterdayโ€™s move isnโ€™t big, whatโ€™s big is the US 10-year Treasuryโ€™s 43 basis point rise in the last one month. This means that, a month ago, investors in long term bonds issued by the US government were getting 1.13% by way of interest and now theyโ€™re getting 1.57%. Thatโ€™s a 40% jump in returns from an asset that is regarded as one of the safest parking grounds for money in the world.

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PFC bonds
Bonds & Deposits
Aarati Krishnan

Do PFC bonds make the cut? Which series to buy?

With bank deposit rates plumbing the depths, fixed income investors are hard-pressed to find investment options that can deliver better returns without big risks. Power Finance Corporationโ€™s (PFC) retail offer of secured non-convertible debentures (NCDs) appears well-timed to capitalise on this need. But should you bite the bait? If yes, which of the 7 bond options is worth a look? An analysis.

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Bonds & Deposits
Aarati Krishnan

Outlook 2021: Debt & Gold

Forecasting is a tricky business and 2020 showed how Black Swans flying at you out of nowhere can make you look foolish. But looking back at the debt outlook and strategy we recommended a year ago, weโ€™re glad we erred on the side of caution.

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Fixed deposit
Bonds & Deposits
Aarati Krishnan

Why bank fixed deposits can be high risk too

If you decide to park a portion of your deposit portfolio in riskier bank fixed deposit options after fully calculating the risks that can play out, thatโ€™s certainly a valid decision. But before you take that call, it is important to know how bank failures actually play out in India.

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Prime Deposits
Bonds & Deposits
Aarati Krishnan

Quarterly review of Prime Deposits: No time for risk-taking

Covid or no Covid, stock markets in the last six months have been quite kind to equity investors. But debt investors have had no such luck. Even though Indiaโ€™s Monetary Policy Committee (MPC) has been in pause mode since June after slashing its repo rate from 5.4% to 4% in the preceding eight months, the returns that savers get on their bank and corporate FDs, bonds and debt funds have continued to plumb new depths.

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guaranteed returns
Bonds & Deposits
Aarati Krishnan

A guaranteed returns option to tackle low interest rates

The Monetary Policy Committee (MPC) in its latest meeting has sent out mixed signals about the future direction of interest rates. Citing an uncertain inflation outlook, it called a pause to its repo rate cuts, holding the rate at 4 per cent. At the same time, it also promised to continue its โ€˜accommodative stanceโ€™ due to unprecedented Covid stress on the economy.

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debt market
Mutual funds & ETFs
Vidya Bala

Debt lessons that you may not have learnt yet

If the recent events in the debt space brought to light the liquidity risk arising from lower rated papers, you probably havenโ€™t seen the unfolding of various kinds of risk since September 2018. In 2013, when duration became a risk on the back of rate hikes, money flowed copiously to credit risk over the next 5 years. Now, the cycle has turned. Money is moving to duration from credit risk.

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wecare deposit
Bonds & Deposits
Aarati Krishnan

Prime Review: Should seniors invest in the SBI WeCare deposit?

With interest rates on debt options falling steeply in the past year, retirees, pensioners and those seeking to supplement their income with fixed deposit schemes have seen a sharp dip in their cash flows. In this context, it is good to see Indiaโ€™s largest bank – State Bank of India (SBI) – coming up with a special deposit scheme for senior citizens while revising its fixed deposit rates recently.

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prime deposits
Bonds & Deposits
Aarati Krishnan

Quarterly review: Whatโ€™s changing in Prime Deposits

These are extraordinary times for fixed income investors. Interest rates, after recent rate cuts by the MPC, are ruling at lows not seen in the last two decades. The repo rate of 4.4% today is even below levels seen during the global financial crisis. Keeping all this in mind, we have made significant changes to our curated list of deposits. Here are the three key sets of changes to the list and why we made them.

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