Fixed Income Investments in Indian Market

Yesterday I was going through some of the Indian newspapers and surprised to see some articles on Indian debtblog-3 market, which is a very rare scenario where the Indian market is dominated by equities. May be it was more a tax saving investment as the equity market where more volatile and IPOs were flopped.

Whereas the developed world debt market dominates where the bond market, has experiences gains and losses in response to cyclical interest-rate, It’s like business cycle during which an economy expands, contracts and recovers could be termed as market cycle.

Before getting back to the Indian bond market let’s try to see the key components of Fixed Income securities, it’s the Credit quality, yield, and maturities are key components of fixed-income securities.
Continue reading “Fixed Income Investments in Indian Market”

Yield Curve and Bond Basics

Yield Curve also called Term Structure of Interest Rates for a bond issuer, the structure of yields for bonds with Woman Doing Calculationsdifferent terms to maturity (but no other differences) is called Term Structure of Interest Rates.

The relationship between and yield on a similar risk class of securities is called the Yield Curve. The relationship represents the time value of money  showing that people would demand a positive rate of return on the money they are willing to part today for a payback into the future. It also shows that a Rupee payable in the future is worth less today because of the relationship between time and money. A yield curve can be positive, neutral or flat.A positive yield curve, which is most natural, is when the slope of the curve is positive, i.e. the yield at the longer end is higher than at the shorter end of the time axis. This result as people demand higher compensation for parting their money for a longer time into the future. A neutral yield curve is that which has a zero slope, i.e. is flat across time. Continue reading “Yield Curve and Bond Basics”

Mutual Funds FMP V/s Capital Protection Schemes – Back to School

Capital Protection Oriented Schemes (CPOSs) made its debut in the mutual fund industry few years back. As the name suggests, the mainstay of such schemes is to provide capital protection. Structurally they are similar to another existing mutual fund category called Fixed Maturity Plans (FMPs), which has been around for a while. For investors, the presence of these categories which are structurally similar, yet distinct in terms of positioning can be confusing. We decided to face-off the two categories and find out how similar or dissimilar they are.

To start with, let us first look at the two categories independently and understand Continue reading “Mutual Funds FMP V/s Capital Protection Schemes – Back to School”

Mutual Fund – Series

How to choose a mutual fund is always been a big question in front of the investor. The generic answer that every body provides is it depends upon the intension and purpose of the investor. It holds true in the circumstances when you have the series of asset managing companies starting from AIG, AXIS, BARODA, BHARTIAXA, BIRLA, BNP, CANARA, DAIWA, DEUTSCHE, DSP, EDELWEISS, ESCORTS, FIDELITY, Continue reading “Mutual Fund – Series”