Sponsored by:
Chat Transcript
28 Jun 2012 - 16:00hrs hrs
Jiju Vidyadharan | Head Funds & Fixed Income Research
Is it right time to invest in fixed income?
Chat Transcript
| shreyokhandelwa: I was to invest around 4000 per month in debt funds or fixed income products.. what should be my approach ? can you sugest which products can i consider. horizon is 3-4 years |
| Jiju Vidyadharan: Mutual funds present a good opportunity for retail investing in debt. You can invest in a variety of funds depending on your investment horizon. In the present interest rate environment, FMPs are a good option to invest for a 1 year period. For a slightly longer term, you can invest in dynamic income funds where the fund manager takes active duration calls depending on the interest rate scenario. |
| manjujejani: Heelo Sir, I want to invest monthly 5000 into some corporate bond with yield of 12 percent or high ..Which one should i invest in? Are these reliable> |
| Jiju Vidyadharan: Corporate bonds are rated instruments, where the credit rating denotes the degree of safety regarding timely servicing of financial obligations. The higher the rating, the greater is the degree of safety. For a monthly investment of Rs. 5000, mutual funds are an ideal option. You can also invest in retail options for corporate bonds. The yield on these bonds is inversely linked to the credit rating.Therefore, higher the credit risk, higher is the yield on the bond. |
| rohitsahasrabud: sir i want to invest 1000rs per month in which stock i should invest which will yield someamount of fixed income for me? |
| Jiju Vidyadharan: Investments in stocks carry market risk and are ideally suited for a long term investment period (at least 5 years). You can invest in equity mutual funds instead of stocks. You can choose these funds using CRISIL Mutual Fund Rankings available on www.crisil.com and www.moneycontrol.com. While choosing mutual funds, you can choose a Dividend option whereby the profits earned by the fund is passed on to investors as dividends. These dividends are tax free in the hands of the investor. |
| navdeep87: sir, what should be i keep in mind before investing in FMP? |
| Jiju Vidyadharan: Since FMPs are close ended funds, you should consider the period for investment. Though FMPs are listed, trading is minimum and intermittent redemptions may be difficult. While FMPs lock in interest rate risk, you should look at the credit risk of investments in the fund. The credit profile of the fund is provided in the offer document. |
