With easing inflation and falling bond yields, in expectation of an interest rate cut, debt schemes registered a quick rally. Over the past one year, income schemes delivered an average return of 12.60%; the best scheme delivered as high as 19.20% returns. With equity schemes in the limelight for the better part of 2014, debt schemes, which had shocked investors in July 2013 with a sudden fall in value, have turned attractive again. In our Cover Story this time, we have analysed how these categories of schemes performed in the past 12 years, over different interest rate cycles. The results provide further confirmation of our belief that, while investing in debt schemes, timing is crucial to get optimum returns.
Our survey of Moneylife readers shows that many are expecting an interest rate cut, and, quite naturally, expecting long-term schemes to do better than short-term schemes.
Which should you choose? Turn to our Cover Story for a comprehensive analysis of debt schemes.
On the subject of investing, should you invest in market leaders rather than ‘emerging leaders’? R Balakrishnan explores the pros and cons of investing in blue-chip stocks. Turn to our Smart Money section to know more.
For some strange reason, the market regulator, Securities and Exchange Board of India seems to think that it is doing a splendid job. Look at the utterly sordid Pyramid Saimira story Sucheta narrates in her Crosshairs section, where she points out how SEBI officials and blatant market manipulators have got away lightly with brazen fraud.
Everybody seems to be singing praises of the forthright speeches of RBI governor, Dr Raghuram Rajan, on the menace of corporate loan defaults. The Indian taxpayer pays the price for the mammoth loan write-off by banks. But nobody seems to realise that it is RBI which, as the banking regulator, makes them file myriads of reports and sits on their boards. Will RBI show a little more responsibility and pro-activeness about the menace, asks Sucheta.
As always, write to us with your views and suggestions. We love to hear from you.
Municipal bonds serve as an efficient tool for local bodies to mop up funds and can be extensively tapped to meet funding needs of urbanisation, while providing a new investment avenue to public and institutional investors