Bonds

accrual funds

Accrual funds: a great contrarian bet

The widening spread between accrual funds’ YTM and repo rate offer an attractive entry at the moment. Based on valuations, sentiments and industry flows, accrual schemes make a good buy at this juncture. Historically we have seen that whenever the spread between YTM and repo rate has been high, accrual schemes have given good risk-adjusted returns …

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bonds

Should investors invest in bonds now?

Bond investors have been hit hard over the past one-and-a-half year. For those in fixed deposits, the interest rates have been low and bonds/debt fund investors have been hit by tepid returns on account of rising bond yields. Currently the preferred strategy remains corporate credit, with exposure to both accrual and credit opportunity strategies. The 10-year …

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crude

Crude-onomics

Fears of fresh escalation in Syria’s war coupled with compliance with a pledge by the OPEC cartel and Russia to limit production are pushing up global crude prices. Crude reserves have declined substantially on increased demand but there has not been any corresponding increase in supply. There are talks of Saudi Aramco, the leading crude …

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nominee in mutual fund

Importance of nominee in a mutual fund investment

Providing a nominee may be a simple but important step in making a mutual fund investment. The importance of this step comes in when a nominee or legal heir has to claim the investment proceeds after the death of a mutual fund investor. A joint-holder, nominee or legal heir can claim the proceeds. The process …

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Debt Mutual Fund

Debt Mutual Fund: Duration Funds vs Accrual Funds

A debt mutual fund holds debt instruments, and these instruments pay a particular coupon (interest). An accrual strategy is holding a bond, earning the interest due, collect the principal at maturity and reinvest it in fresh bonds. Liquid funds, ultra-short term funds, short-term debt funds, income funds and credit opportunity funds primarily follow an accrual …

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