To increase fund flow in the bond market, market regulator Sebi on Wednesday issued guidelines allowing overseas individual investors to invest up to $1 billion in corporate bonds and debt schemes of mutual funds without any lock-in period.
At the end of the day, this isn't about choosing between EMIs and SIPs. It's about choosing your path to financial freedom.
The mutual fund industry in June invested in companies like Piramal Healthcare, Reliance Petroleum, IFCI and Ashok Leyland. Interestingly, there was not much redemption pressure on them despite the Sensex skidding by another 2,570 points in June.
The answer depends on your financial goals and risk appetite, says Certified Financial Planner Ramalingam Kalirajan, and explains why.
Mutual funds (MFs) have lined up information technology (IT) funds, indicating that technology stocks are back on fund managers' radar after a hiatus. Over the past 18 months, stock prices for companies in the software space have either corrected or remained subdued. Fund houses have launched five IT-based sectoral funds in the past three months, with three of them taking the passive route.
'Those satisfied with returns and not expecting further rally could be booking profits and also stopping SIPs.'
Actively managed debt funds with the flexibility to go long on duration made a strong comeback on the returns chart in 2023, thanks to softening bond yields. The average one-year returns of floater, long-duration, gilt, and dynamic bond funds, which ranged between 2.3 per cent and 4.5 per cent at the end of 2022, now stand at over 7.2 per cent, with some schemes delivering over 8.5 per cent, according to data from Value Research. Debt fund returns are inversely related to yields of underlying investments, meaning a decline in yields is positive for funds.
If they act now, they can reshape the strategic map of Asia without firing a shot. If they wait, the next opportunity will come only after a serious Taiwan Strait incident -- by which time the price will be far higher, and the room for boldness far smaller -- the opportunity may well be lost by then. The question is no longer whether this can or should be done, points out Varun Arya.
'Investing abroad helps mitigate currency risk for foreign-currency denominated goals, such as children's higher education and international travel.'
These funds have lowered the entry barrier for investors who can now invest with just Rs 5,000, points out Sanjay Kumar Singh.
'Market corrections are a natural part of investing, so it's essential to remain focused on long-term financial goals.'
'What we need to watch is how Saudi Arabia's financial assistance will be used by Pakistan. If the funds go to build their military hardware and operations, it should worry us.'
From the enactment of the capital control Act to the recognition of the BSE as a stock exchange and the infamous Harshad Mehta scam, here are the 18 biggest events for stock markets from 1947 to 1993.
Sudhanshu Singh, director IBBM, MM Securities, answers your mutual fund queries.
'It is requested that listed equity shares or units of equity-oriented fund schemes be exempted from capital gains tax (LTCG) if equity shares or mutual funds units are held for at least three years.'
The number of fund houses are increasing each year in the fast growing Indian economy but when it comes about the size, the top five players control over half of the country's mutual fund business.
Saurav Ghosh's step-by-step guide will help you understand what bonds are, how they help investors make money, how much money they make and which bonds to invest in.
What appeared to be a generous act of friendship was, in truth, a manoeuvre within a much larger strategic game. The United States used the 1962 war not just to aid India but to test how far it could be pulled into the Western fold, points out Dr Kumar.
'It could tempt investors to pick stocks that are not fundamentally sound.'
'Investors should allocate about 5% to 10% to such funds.'
Co-location attracts institutional investors, which drives volumes for long-dated options, with higher realisations at lower costs.
Manas Sood, a Class 12 student from the Delhi Public School, has distributed 2,650 boxes of Tax City Education and empowered over 12,000 students from 52 schools across India. His aim? To help young Indians understand taxes and become financially literate.
Excess earnings of unlisted companies over and above their interest costs are at a record level. The interest-coverage ratio of 2.94 is the highest going back to 1990-91, according to numbers from the Centre for Monitoring Indian Economy (CMIE). The ratio measures earnings relative to every rupee to be paid as interest on outstanding debt.
Your choice between the Old and New Tax Regimes should reflect your financial strategy and investment goals, says Ramalingam Kalirajan
'Sector funds like IT funds should be included only in the satellite portfolio.' 'Limit your exposure to IT sector funds to around 5-10 per cent of your equity portfolio.'
'Investors who remain calm, consistent, and disciplined through short-term volatility are usually the ones who benefit most in the long run.'
Despite the rally in equities over the last few years, India, according to Christopher Wood, global head of equity strategy at Jefferies, is still in early stages of an equity cult. Any changes to the capital gains tax for equities - both long-term and short-term - in Budget 2024 scheduled to be announced on July 23, he believes, can trigger a bigger correction that what the markets witnessed post the Lok Sabha election outcome on June 4 that saw the Bharatiya Janata Party (BJP) lose majority, though it was able to form the government with the help of coalition partners.
Most large fund houses, such as HDFC MF, ICICI Prudential AMC, Reliance MF, Reliance MF, Birla SunLife MF and SBI MF, have the backing of large banks or financial institutions, giving them reach and understanding, they say.
Barjeel Geojit Securities has launched an online platform for NRIs to trade Indian Mutual Funds.
Long-term tax-saving FDs can also be considered after the PPF limit has been exhausted.
'BSE has facilitated nearly Rs 35 trillion in capital raising across multiple segments.'
AIFF's RFP: No franchisee fee for clubs in ISL, commercial partner to provide video support system
The Indian markets have delivered high long-term returns, second only to the US.
The Indian equity markets have significantly increased in importance within the emerging market (EM) basket of stocks in recent years. Since 2018, India's weighting in the Morgan Stanley Capital International (MSCI) EM Index - tracked by passive funds with assets of nearly $500 billion - has doubled, while the number of domestic stocks has grown by almost 70 per cent.
