Prajna Capital |
| Long Duration Debt Muutal Funds Posted: 12 Dec 2014 04:14 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Long duration debt funds
The Reserve Bank of India ( RBI)' s September 30 monetary policy review left many disappointed, as the wait for loan rates to fall became longer. However, one can take advantage of the falling bond yields to invest in debt mutual funds.
Bond yields have started easing due to a fall in inflation, a drop in oil prices and expectations that an increase in US treasury yields might take longer. Experts say as bond prices are starting to rise, this is the time to invest in income funds, just before they rally.
According to Bloomberg data, the yield on the 10- year benchmark government security, which stood at 8.55 per cent on September 1, fell to 8.36 per cent on October 22. By comparison, the yield on the 10- year US treasury is 2.2 per cent.
Easing inflation numbers and global oil prices are two factors that work in favour of bond prices. It is possible RBI might cut interest rates earlier than expected, which will help bond prices gain further. RBI is expected to cut interest rates only in the second quarter of 2015. But if oil prices remain where they are and inflation remains under check, it is possible the central bank might cut rates earlier. Therefore, income funds will do better when rates decline," he adds.
Allocations towards long- duration funds, as fundamentals point to attractive returns in the next two to three years. We believe both government and corporate bonds are likely to do well on account of improving fundamentals. High- duration funds are at the higher end of the volatility curve in the short term, but have a potential to deliver significant returns over the long- term investment horizon.
So far this year, foreign institutional investors have invested $ 22 billion in Indian bonds. As other markets such as Europe, the US and Japan are facing headwinds, demand for Indian bonds will continue to be strong. And, when the US starts raising interest rates, the yield curve for the two to three- year bonds will start rising, says Dalal.
Retail investors are better off investing in income funds rather than gilt funds, as the latter are more volatile. It is better to invest in income funds with average maturity of less than five years, which have a combination of bonds and government securities ( GSecs) and can tweak their average maturity based on interest rate movements. With income funds, the accrual part will ensure investors continue to generate returns, even in the absence of rate cuts. Also, it will provide an opportunity to gain from a fall in yields in corporate bonds, with a recovery in corporate earnings. Dalal agrees income funds give better risk- adjusted returns compared to G- Sec yield funds. As the average maturity of G- Sec funds are higher, they tend to be more volatile.
A two- to- three- year perspective, investors can make some allocation to longer- term funds, both income and G- Sec yield funds. As all macroeconomic factors in India are taken care of, the possibility of inflation rising is low. The only risk is a rise in the interest rate in the US. On the domestic front, if inflation comes under control, the scenario will be one of secular downward movement in interest rates. Similarly, when interest rates are cut, G- Sec yields will also come down
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF |
| Posted: 12 Dec 2014 03:58 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
How to Claim Your Money
This amount has been idling with banks, insurance companies, mutual funds and in post office schemes. Find out how to retrieve it.
An estimated `37,500 crore is lying unclaimed with insurance companies, banks, corporate houses, mutual funds and the Department of Posts. If you add `26,497 crore in inoperative Provident Fund (PF) accounts with the EPFO, the total wealth idling without interest adds up to more than `64,000 crore. Assuming a nominal rate of 8.5%, investors are losing almost `5,500 crore in interest every year. This estimate does not include many small savings schemes, for which the data is not available. One unconfirmed estimate has pegged the unclaimed amount in inoperative accounts in the PPF at `22,000 crore. That's not unbelievable. In July this year, in response to an RTI petition by Gurgaon-based activist, Aseem Takyar, the Department of Posts had divulged that Indira Vikas Patra maturity proceeds worth `896 crore were lying unclaimed in government coffers. Three months ago, the government set up a committee headed by RBI Deputy Governor H.R. Khan to find out the quantum of unclaimed deposits with the postal department and PSU banks. The committee is expected to submit its report by 31 December.
The post office schemes are not the only black hole that has swallowed investors' wealth. Life insurance companies have `5,849 crore of unpaid benefits idling with them. The amount has more than doubled in the past two years. The 58-year old Life Insurance Corporation has the biggest chunk (`1,548 crore), but Reliance Life Insurance is not far behind with `1,502 crore (see graphic). Banks too are wallowing in this forgotten wealth, with `5,125 crore waiting to be collected by depositors and account holders. The unclaimed amount in banks has shot up in recent years because the banks started with the implementation of the RBI guidelines on dormant and inoperative accounts only in 2009. Then there are corporate houses, which have roughly `3,454 crore in unpaid dividends, unclaimed debentures and deposits. Mutual fund houses also have more than `770 crore in the form of unclaimed dividends and redemptions. Interest-free loan to government
The EPFO is also sitting on a massive `26,496 crore in inoperative PF accounts. An account is classified as inoperative if there is no deposit for more than three years. Under a new rule in 2011, no interest is payable on the balance in an inoperative account. It is akin to giving the government an interest-free loan. At 8.75%, the owners of these accounts are losing more than `2,300 crore every year.
The EPFO officials say that many of these inoperative accounts belong to people who have changed jobs and not transferred the balance from the previous account. The introduction of the Universal Account Numbers (UAN) will help the EPFO trace the owners of these accounts.
How to claim your money
If the amount with companies, banks and mutual funds is not claimed for more than seven years, it is transferred to Sebi's Investor Education and Protection Fund (IEPF). Investors can reclaim the amount by approaching either the fund house, company or registrar. You can get in touch with them, update your address and submit the KYC documents, along with the forms specified by the entities for the purpose.
The RBI, too, has established a Depositor Education and Awareness Fund (DEAF), where unclaimed deposits and bank balances of inoperative accounts flow in after waiting for 10 years. One can claim this amount even after the transfer. If the account holder furnishes identity proof, the bank will have to return the amount, along with interest. Banks have also been asked to display unclaimed deposits and inoperative accounts on their websites. The Insurance Regulatory and Development Authority (Irda) has notified guidelines to help policyholders claim the sums. From January 2015, policyholders can visit the insurers' websites to find out if there is any amount due to them. One can access this information by providing the name and date of birth, or PAN and policy number, to facilitate authentication. After verification, the insurer will initiate the disbursal.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF |
| Posted: 12 Dec 2014 03:11 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Kotak Mutual Fund SIP Booster Facility
Kotak Mutual Fund has introduced SIP Booster Facility under Systematic Investment Plan (SIP) facility for all open-ended schemes of Kotak Mutual Fund. Under this, the investor has an option to increase the amount of the SIP installment by a fixed amount at pre-defined intervals.
The facility will have half-yearly and yearly frequency and the minimum installment amount will be Rs 500.
The change will be effective from December 01, 2014.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF |
| You are subscribed to email updates from Prajna Capital - An Investment Guide To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment