SEBI, in June 2019, made a few changes to investment guidelines and valuation of securities in debt mutual funds. These changes enhance credit and liquidity profile of the liquid funds. At the same time, these changes can make liquid funds a bit volatile. Let’s try to understand the new SEBI rules. #1 Liquid funds are now required to hold 20% in liquid … [Read more...] about Liquid Funds to have exit load and will now be a bit volatile
debt mutual funds
Debt mutual funds are again in the news. On June 4, 2019, DHFL could not make the interest payment on one of its bonds. It says that it will pay in another week. Does not matter. Even the slightest delay is considered a default. As per extant rules, even if a default happens in one security by DHFL (not the one held by the fund scheme), the value of the all the bonds from … [Read more...] about The DHFL Mess: Learnings and What should you do?
Debt mutual funds are not without risk. When a default or a rating downgrade of an underlying security, NAV of the fund takes a hit. Not just that, it poses an additional problem. In such cases, some of the more knowledgeable investors can benefit at the expense of less aware investors. SEBI has come out with a circular to address the issue. What is the issue if there is a … [Read more...] about What is Side Pocketing in Debt Mutual Funds? How it helps?
SEBI has specified many categories of debt mutual funds. In this post, let’s talk about money market funds. I will address common questions about money market mutual funds in this post. Where do Money market funds invest? What are money market funds? Who should invest in money market funds? How much return you should expect? What you should keep in mind while selecting a … [Read more...] about What are Money Market Mutual Funds?
Every few months, we see Non-convertible debenture (NCD) issues from various companies. As on date (September 7, 2019), the NCD issues from Tata Housing, Aadhar Housing Finance and IndiaBulls Commercial Credit are live. Should you invest in such NCDs? Well, in this post, I will not review any particular issue of NCD. I will focus the benefits and risks involved in investing … [Read more...] about Should you invest in Non-Convertible Debentures (NCDs)?
Equity funds are risky but debt funds are safe. Isn’t that what most of us think? That is clearly not the case. Debt funds carry risk too, something that is ignored by many investors. Many argue for debt mutual funds as a replacement for replacement for bank fixed deposits. In fact, I have written a post comparing debt mutual funds and fixed deposits and how debt mutual … [Read more...] about Don’t ignore the Risk in Debt Mutual Funds
I have already covered the most aspects in my earlier post on Bank Fixed Deposits vs Debt Mutual Funds. In this post, I will discuss a very specific case when you need to withdraw money before 3 years. In such a case, which investment product should you choose? Debt MF or a Fixed Deposit? Taxation of Fixed Deposits and Debt Mutual Funds Interest income from fixed deposits … [Read more...] about Bank Fixed Deposits Vs Debt Mutual Funds : Part II
For most of us, our search for debt investments begins and ends at bank fixed deposits. When we have idle money in our bank, we invest the excess amount in fixed deposits. Bank fixed deposits are easy to understand. You simply need to walk into nearest bank branch to invest. Moreover, with net banking becoming more and more popular, opening a fixed deposit is merely a click … [Read more...] about Bank Fixed Deposits vs Debt Mutual Funds
For most retail investors, mutual funds mean equity mutual funds. Well, equity mutual funds have a sibling too i.e. debt mutual funds. Though total investments under debt mutual funds are far greater than equity mutual funds (due to higher institutional participation), most retail investors don’t consider debt funds. Primary reason is there are other financial products such as … [Read more...] about PFP Primer: All you need to know about Debt Mutual Funds
Arbitrage funds are a variant of mutual funds. In fact, you can call them a variant of equity mutual funds. Ever since the taxation of debt funds became adverse in mid-2014 (holding period for long term capital gain increased from 1 year to 3 years), assets under management for arbitrage funds have grown sharply. So, what exactly are arbitrage funds? How do these funds work? … [Read more...] about Should you invest in Arbitrage Funds?