A debt PMS usually gives higher returns than a debt mutual fund because the former has a concentrated portfolio and no limit on weightage to one particular bond or commercial paper, says an expert
Raj Khosla, a Delhi-based financial planner, recommends investments across all asset classes, proportionate to your risk appetite. In the current volatile market, he advises investing in small quantities at every market fall.
Debt mutual funds were one of the main sources of funding for NBFCs and lower inflows due to the tax regime could pose a risk
Given the uncertainty around the future movement of interest rates, the yields provided by these debt investment products look attractive
In swing pricing, the NAV of the fund will be adjusted so that the transaction cost is effectively passed on to the investor whose entry or exit disturbs the NAV. Smaller investors will benefit
Who will bear the credit risk?
The prime reason is commercial banks, the largest players in the market, have no incentive or pressure to trade in the secondary market
The Sensex is at lifetime highs but the Midcap index is more than 20 percent away from its highs. investors should not put in lump-sum amounts into the market and build positions gradually, says Sunil Sharma of Sanctum Wealth Management.
Existing debt mutual fund schemes too have to comply with the new norms. These norms should help contain the risk, and of course will influence the returns too.
Interest rates and prices of fixed income securities that a debt mutual fund invests in are inversely proportional. Read this space to know how debt funds are impacted with the fluctuations of interest rates and what strategy should one choose in current volatile debt market.
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