The IL&FS default in September 2018 and the subsequent defaults by others, have caused concern among fixed income investors.
Many of us were chasing yields blindly till Sep’18, oblivious to the associated credit and liquidity risks. Then IL&FS happened followed by others like DHFL, Essel, Reliance Home Finance, Sintex, etc and now we are chasing safety. Financial crises are unavoidable. Since 1991, we have seen a financial crisis every 5-6 years – 1990-91, 1997-98, 2008-09, 2013-14 and 2018-19 – barring 2002-03. Rather than wishing them away, let us understand how to protect our portfolios from them.
Long bull markets induce complacency. The consistent performance of credit funds since 2014 made investors believe that debt funds are devoid of risks. Events since Sep’18 have forced a rethink. Debt funds do carry market risk. When they invest in corporate bonds, they also carry credit risk i.e. risk of default or delay. Forced rollover of some fixed maturity plans and disproportionately large losses in some open-ended debt schemes, shows they also carry liquidity risk. How does one mitigate against these risks?
この記事は Investors India の July 2019 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です ? サインイン
この記事は Investors India の July 2019 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です? サインイン
ASK THE EXPERT
Ques. One of my friends told me that your company provides detailed Retirement plans. I want to know what is the procedure to get my Retirement plan. I will be retiring in March 2025. R.P Gupta, Noida
How to Naturally Reverse Fatty Liver Disease
The liver, located on the upper-right side of the abdomen, is the body’s largest internal organ and plays a critical role in detoxifying the blood and processing nutrients.
Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile
Do you think the market is overpriced? Is yes, should investors refrain from investing in index schemes at the current valuation?
India will continue to enjoy benefits of a close US relationship and trade will continue to grow
Q1. The US elections are said to be one of the closest till date, what impact will the election of a Republican / Democratic party have on the US economy and how is that going to affect India in the short as well as the long term?
Understanding Momentum Funds
Momentum funds are a type of investment fund that focuses on companies experiencing positive momentum in factors such as earnings, revenue, and stock price movement.
Risks and opportunities associated with Small Caps
Small-caps are a stock-picker’s paradise.
How to navigate your portfolio through bull market a
Indian equities have been in a bull run for the past four years.
Choosing mutual fund schemes depending on your age to achieve life goals
The choice of mutual fund (MF) scheme might be influenced by one’s risk profile or age.
Thematic Fund Or Sectoral Fund, Which Fund Suits You?
A thematic fund is a type of mutual fund that focuses on investing in companies based on specific themes or trends.
Be Kind To Your Kidneys
The kidney is a vital organ in our body which is four inches long and two and a half inches in width.
