debt funds

Prime Strategy for Debt market 2020

Our article on the debt market outlook for 2020 outlined the following key trends in interest rates that are likely to play out in 2020. So how should debt investors in India position their portfolios to tackle these trends?

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Vodafone’s impact on your debt funds – What now?

For those of you who did not follow us 2 months ago – we not only gave a timely caution but also gave exit strategies based on the exposure that you had to funds that held the Vodafone paper. Now, in the current scenario, if you are still holding the funds that had exposure, what should your strategy be?

What returns should you expect from your debt funds?

The last two years of turmoil in the debt fund space may have left you wondering what returns to expect from debt funds. Will debt funds beat FD? Or would their returns hover somewhere around their yield (yield to maturity) as promised by some? Are double-digit returns possible in debt? Use this analysis to set more realistic expectations from debt funds instead of a vague 8% or 9% return you may have in mind.

The emergence of a new class of ETF in debt

Owning bonds, unless you are well-diversified, has become a super risky proposition since September 2018. Credit risk and drying up of liquidity have proved to be lethal combinations to manage for investors. Now the debt ETF space may receive some life with the soon-to-be launched defined maturity PSU Debt ETF.

Indexation in debt funds – pay little or no tax

Cost inflation index benefit makes the post-tax return of debt funds far superior to fixed deposits. Please note that debt fund taxation has undergone a change. Indexation benefit will not be available for investments made from April 1, 2023 onwards. You can read about this in our article, ‘Tax changes in mutual funds: How to …

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