Investors turn to G-Secs as yields surge, small savings rates stay put
“Government bonds carry sovereign ratings, there is no credit risk, high liquidity and returns are higher than traditional small-savings products and bank deposits”.
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Longer-tenure G-secs Gaining Popularity over PSU Bonds, State Development Loans as heading.
Mumbai: Affluent investors allocating money to fixed income instruments are increasingly buying government securities(Gsecs) over AAA-rated public sector undertaking(PSU) bonds and state development loans(SDL), as the difference in returns has narrowed down and is at a historical low.
“We have never seen such narrow spreads between Gsecs and AAA-rated PSU bonds or SDLs. We are seeing a huge demand for Gsecs from rich investors since they are available in longer tenures, carry the highest safety and are more liquid,” said Vikram Dalal, MD, SynergeeCapital.
Rich investors turn to long-term government bonds
“Rich investors are showing interest in government papers maturing in 2045, 2050 and 2060,”. “Many HNIs want a regular income for their next generation with no credit risk or put/call option.
Should You Invest In Credit Risk Funds Now?
We will have to wait and see if there are any major NPA issues in the books of non-bank financial companies (NBFCs) after the additional six-month window given to NBFCs to comply with asset classification norms, is over.
PCHF bonds offer a chance at double-digit returns
Mumbai: Investors looking to earn double-digit returns from their fixed income portfolio can consider an investment in the nonconvertible debentures of Piramal Capital and Housing Finance.
Why are debt mutual funds suffering?
“With rising yields, debt funds are at risk of losing value”. Individual investors should not go for long term debt funds especially when the interest rate cycle is turning. Instead, they should opt for shorter duration debt funds or shorter term bank deposits.
Should investors consider credit risk funds now? Experts weigh in
We will have to wait and see if there are any major NPA issues in the books of non-bank financial companies (NBFCs) after the additional six-month window given to NBFCs to comply with asset classification norms, is over. So, the picture is not yet fully clear there.
Pay heed to residual maturity in secondary market bond buys: Experts
Many platforms have cropped up in the recent past that have made it easier for retail investors to participate in the secondary bond market. There is the Reserve Bank of India’s Retail Direct Scheme, which allows them access to both the primary and secondary market for government securities (G-Secs).
As yields head north, time to exit long duration debt funds
Fund managers and investment advisors are recommending investors to square off their holdings in long-duration bond funds and gilt funds as bond yields are expected to firm up over the next year. The money could be reallocated to liquid funds or short-tenure bonds.
Perpetual bonds back in favour, PSBs raise over Rs 24,000 cr in three months
Wealthy investors are seeking higher interest income particularly when the stock market seems to have peaked for now. This has prompted many rich individuals to bet on perpetual bonds sold by credible public sector banks.