It’s fairly obvious that sector funds and thematic funds can offer a good avenue to boost returns. Another plus is that these funds give you some control over which sector to hold, based on where you think opportunities are – unlike other equity funds where sector allocations are based on fund manager views.
How to play the SDL bond opportunity?
It’s not an easy life for fixed income investors looking to earn decent yields today. With RBI regularly mopping up government securities through its G-SAP programme and also reining in yields on new issues, the 10-year government security has been caught in a range of 5.8 to 6.3 per cent for the last one year, despite elevated inflation.
Balanced Advantage Funds for SWPs – Last week saw the NFO of SBI Balanced Advantage Fund close – and collect a whopping Rs 14,500 crore. That puts it in third place, in terms of size, in the balanced advantage/dynamic asset allocation category. A lot of the attraction here for investors, seeded by the distributors and the fund itself, centered around the scheme’s ability to offer monthly income.
When you have a large sum to invest in, you have been told, it is best to systematically transfer it using what is called the Systematic Transfer plan (STP). This does exactly what an SIP does, except that the money to be invested, in this case, does not lie in your savings bank account. It lies in a fund. Also, unlike a SIP, where you typically invest from your monthly savings, in STP you simply deploy the lumpsum that you already hold. So far, so good. But for how long should you run this STP? Which funds do you go for? And should you always use an STP when you have a lumpsum?
Could upping the frequency with which you run your SIPs net you better returns? The primary aspect you look at in SIPs is that it helps invest across different market levels and therefore averages your investment cost down. If that’s the case, it follows that making very frequent investments will help capture more market volatility than just once-in-a-month investing.
Some of you wish to invest in index funds and want to know the best index funds. Others want to hold a portfolio of index funds. Building a portfolio out of index funds or adding index funds calls for mixing strategies and market-cap segments. In this article, we’ll try to explain the key characteristics of some of the equity indices and how they can be paired with other index funds/ETFs or with active funds.
A recent addendum by Aditya Birla Sun life suggested that investors rollover some of the AMC’s FMPs that are maturing. The reason was that given the low-rate scenario, investors are unlikely to get good interest rates outside once they exit. And that staying invested would provide indexation benefit for capital gains and earn higher returns.
But some investors raised the doubt on whether the FMPs under question were in trouble. We therefore looked at their portfolios. They had high-quality AAA-holdings are unlikely to have had any pressure on repayment. In other words, there does not appear any credit related rollover compulsion.
Many of our customers have written to us asking whether they should continue with the Franklin Templeton funds that they hold. People are worried not just about debt funds, but about the future of their equity funds as well. These worries are not misplaced given recent developments at the fund house.
As readers of this space know, we have been tracking the performance of this fund house from a time well before the crisis relating to the decision to wind up six debt schemes unfolded. So, for us here at PrimeInvestor, this question of what to do with your holdings is not tough to answer.
Perpetual bonds have caused some sleepless nights for fund managers after SEBI’s circular earlier this month. On March 10th, SEBI issued a circular capping the debt scheme exposure to perpetual bonds at 10% and also laying down new rules how these bonds should be valued in debt scheme portfolios. We wrote a short take on it last week suggesting that you wait for clarity. SEBI has now come up with one more circular offering some clarification.