SWP: SYSTEMATIC WITHDRAWAL PLAN
Assume a fund growth between 8-9% p.a. (there are many such funds). Effectively such a fund is paying 0.67-0.75% per month. In reality, returns are not linear. I.e. based on interest rate scenario fund will move up say 1% in a given month and move only 0.1% in yet another month but will grow at […]
Declining FD Interest rates bring focus back on Debt Mutual Funds
Over the past few years, The Reserve Bank of India (RBI) has consistently lowered interest rates. Consider this, The RBI has lowered its Repo Rate (i.e. the rate at which RBI lends to commercial banks) from a high of 8% in 2015 to its current rate of 4%. Falling interest rates have resulted in a significant reduction in […]
Debt Fund Terminology – YTM vs Actual Returns, Modified and Macaulay Duration
A few days back, I wrote an article on various debt mutual funds and what investors must consider before investing. Some of the questions I received gave me the idea of writing this part 2. I will try to explain basic debt fund terminology here. What is Yield to Maturity (YTM)? Debt mutual funds, being market linked, […]
Which Debt Mutual Fund Should You Buy?
Over the last few weeks, I have been reading many articles on various aspects of debt fund investing. I have also received many queries on where investors should park their money to cushion against stock market uncertainty. To quote some of the more relevant questions: Are debt funds safe? So many companies are defaulting, will […]
Vodafone Idea Default: Impact on Debt Mutual Funds
What really went wrong with Vodafone Idea? Brief background: Fifteen telecom companies owe over Rs 1.47 lakh crore to the Government of India in lieu of past license fees, spectrum charges, interest and penalties (“Adjusted Gross Revenue” or “AGR“). Vodafone Idea alone owes the Government over Rs. 54,000 Crore in this regard. Keep in mind: Of […]
Top Dividend Paying Mutual Funds
Dividend Paying Mutual Funds – Typically, these mutual funds (i) invest in stocks, and; (ii) follow a strategy of investing in stocks that generate a higher dividend yield. When are Dividends paid to Investors? Mutual fund schemes declare dividends for its unit holders, traditionally at the end of the financial year, from realised profits in their […]
Top Mutual Funds With Minimum Difference in Expense Ratio
Expense Ratio: the amount an investor pays to a fund manager every year to manage his money. Expenses include fund management fee, agent commissions, registrar fees, and selling and promotional expenses. Note: According to regulation 52 of SEBI Mutual Fund Regulations, there are limits on the total expense ratio (which includes investment management and advisory fees) charged by mutual […]
Debt Mutual Funds – Yes bonds are cheap, but for a reason
Over the last few years debt mutual funds have gained popularity over fixed deposits, purportedly for tax efficiency and better returns. The real reason for their popularity however lies in the fact that these funds were promoted far more aggresively than other fixed income products like fixed deposits. This, even if listed securities by their […]
Investing in Debt Funds: A Compelling Case
3 reasons why investing in debt funds is the best thing to do right now: Bond Prices are low and everyone got hurt: About 2 years back when more and more companies started tapping into debt capital markets to raise capital, debt funds were just beginning to get popular. There was a bit of frenzy […]
Should You Hold Your Mutual Fund Units In Demat Account?
When you buy mutual funds from any fund house, you can choose between getting your mutual fund units in demat account or you can hold it with the AMCs. Please note that once mutual funds units are in demat account, investors can sell/redeem units either through stock broker or through the Exchange platform (BSE Star […]