New share offers are a thing of joy in a bull market. They promise to bring quick gains within two days of investing the money. In season, too many people chase the IPO, the allotment is a lottery and most retail folks get allotment of shares valued at about Rs.15,000, which is considered as “one lot”. And of course, there is the “HNI” category where you have a shot at bigger allotments. Many resort to NBFC funding which is available in plenty, to improve their odds in this lottery.
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.
A good way to gauge the state of personal finance books that are India-centric would be to visit the ‘Book’ section of Amazon’s India website.
If you go to the American Amazon.com, you will find the ‘Business and Money’ section, under which you will find ‘Personal Finance’. Boom, done – you have access to a treasure trove on all topics PF.
If you go to the Indian Amazon.in, you will find a ‘Business and Economics’ section, and under that, you will find ‘Analysis and Strategy’, ‘Economics’, and ‘Industries’. If you, by power of logical reasoning and elimination, go into the first category, you will find, along-side books about American personal finance and self-help (Dale Carnegie!), a smattering of books by Indian authors to help Indian investors.
A handful, at best.
No doubt, this is an emerging section, but the current state of limited selection is properly captured by just browsing through these aisles.
Monika Halan’s ‘Let’s talk money’ is, especially in this context, a much-needed publication that addresses a sore need in the Indian market.
Debt funds are back to worrying many of you. Returns are dipping, there’s a lot of talk on yield movements both at home and in the US, there’s the question of where rates will head now. Over the course of the past several weeks, we have fielded several questions from you on what this means and what you should be doing with your debt funds.
We’ve written extensively on the developments in the debt space in different articles. But here’s answering the questions that appear to worry you the most.
The mechanism of expense ratios in mutual funds is a befuddling topic for many investors. Over the years, questions associated with expense ratios have been among the most frequent that I have answered.
This essay is an attempt to answer questions on this topic in a patient and clear manner. But before we find out how it works, let’s understand a bit of what it is.
Target maturity funds invest with a stated maturity and pay you back when the maturity is reached. You can call them an FMP but one that is open-ended and takes fresh inflows and outflows.
With yields beginning to move up, more funds are now beginning to talk about ‘roll down strategy’ or a strategy where a maturity date is fixed thereby ensuring that the portfolio’s average maturity steadily falls as it nears maturity. For example, a 2027 target date fund will have a 6-year maturity now and a 5-year maturity in 2022 and so on, until the maturity reduces to near zero in 2027.
Small finance banks, with their focus on small ticket loans for urban and semi-urban India, are a play on the underpenetrated market for financial products in India. Yet, after stellar performances soon after their IPOs many of these stocks have seen their valuations levelled. So, when a new candidate – Suryoday Small Finance Bank IPO (Suryoday) comes out in an overcrowded primary market, how should it be judged? Read on.
“Can I invest in hybrid funds” is a question that we often get. Ranging from the aggressive equity-oriented funds to arbitrage funds, the broad term is ‘hybrid’. We have already discussed some of the key categories of hybrid funds in our earlier articles.
However, this one will cover all of them in a single essay and let you know when and whether you need them.
World over, planning and investing for retirement in a disciplined fashion is not the norm. However, western countries have a healthy social security net that would keep people out of really bad situations, and many such countries would have state-sponsored health coverage that would take care of the inevitable big bills in old age.
India has neither, at least not in a manner that will cater to a middle-class life-style and care aspirations here. Hence, planning, saving, and investing for retirement becomes a must-do activity during the earning years of an individual in India.
P V Subramanyam’s book – “Retire Rich – Invest Rs 40 a day” was the first book on this topic. The original version was published in 2011 and sold more than 150,000 copies, and is now available in a new edition (since 2019).
A cocktail of factors – from the rollout of the Covid vaccine across the world, to optimism about economic recovery to a spiking of US bond yields – has had a dampening effect on gold, pushing it into an official bear market. (A bear market is roughly defined by a 20% decline in any asset from its peak).
This is an update to the Nifty outlook that was posted on January 9 2021. The Nifty 50 index has achieved the first upward target of 14,600 that was mentioned in the earlier post. And the index also got within striking distance of the second target of 15,900. The Nifty 50 index registered a high of 15,371 before the recent slide.