Most experts believe that it is only a matter of time before the RBI begins to hike the repo rate. Debt mutual fund investors need to take cognizance of this shift and avoid being taken by surprise.
In recent times, interest rates within the debt market have been moving upward. The 10-year G-Sec is at around 7.20 per cent (at the time of writing). Several factors are responsible for this. The ongoing war between Russia and Ukraine has led to supply disruptions and caused worldwide increase in prices of crude oil and commodities.
To contain inflation, central banks are hiking rates. The Bank of Canada was the latest to increase its benchmark rate by 50 basis points. The market expects the US Federal Reserve to hike rates as many as six-seven times. In India, too, most experts expect at least a 100-basis-point increase now.
Where should you invest in such a scenario? It is best to stick to shorter-duration funds when interest rates are rising. That is because these funds invest in bonds having shorter maturities. Since the average duration of their portfolios is low, they take lower mark-to-market hit due to rising rates.
Esta historia es de la edición May 2022 de Investors India.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición May 2022 de Investors India.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
5 Steps To Achieve Your Financial Goals
From a beach house, a Jaguar, to traveling the world – there are many things in life that we want to accomplish.
Microbiome: The Invisible Ecosystem Within us that Safeguards our Health
Imagine being able to heal yourself and build immunity against major diseases without relying on heavy medication. It sounds fantastic, right? Who wouldn’t want that? The key to achieving this lies in a fascinating area of research—our microbiome.
Gold ETFs: Attractive option for retail investors to take exposure to yellow metal
With the equity market experiencing volatility in August, investors are increasingly seeking to diversify their portfolios.
The Retail Revolution: How India's Stock Market Got a Makeover by the Common Man
In the annals of India’s financial history, the stock market has long been the playground of the big boys—mutual funds, insurance behemoths, and foreign portfolio investors (FPIs).
Strategies to adopt when the markets are at a high (for new and existing MF investors)
An investor must have a plan in place and, more importantly, stick to it regardless of shifting market conditions.
A Collaboration to keep Health FirstPNUT and IDA come together as One!
You reap what you sow! And if you sow health, you will reap a healthier tomorrow. Following the same lines, Personal Nutrition (PNUT) and Indian Dental Association (IDA) have come together as partners to promote complete health and nutrition for each individual! How things unfolded? Let’s explore.
Making a choice between equity and debt mutual funds for long-term goals
Mutual funds are quickly becoming a preferred investment choice for millennials.
ASK THE EXPERT
From last Financial Year, I have shifted to the new Tax Regime.
Flexi-cap Fund Vs Hybrid Fund
Investors in mutual funds can choose from equity, debt, or hybrid funds, each offering different risk and return profiles. Flexi-cap funds provide diversification across market capitalisations, while hybrid funds balance equity and debt for stable returns.
Neuroplasticity: You Can Teach An 'Old' Brain New Skill
A few decades ago, it was believed that the brain’s structure and functions were entirely dependent on genetics, age, and early childhood experiences.