Choose Debt fund wisely

The Reserve Bank of India (RBI) had cut the repo rate by 0.25 percent, in its third bi-monthly monetary review for the financial year 2017-18, on August 2, 2017. 

The move is surely going to depress the retirees and other investors who rely heavily on the fixed income products such as bank fixed deposits. The bank FD rates are already lying low and in all probability will come down further.

The option one can opt is debt fund.
For a retiree, building up a portfolio to meet regular income needs requires careful attention. Safety, liquidity and post-tax return have to be kept in mind. Bank FD can be between 10%-15% of their portfolio for immediate liquidity requirement and debt mutual fund should be around 75%-80% of their portfolio, 
* Basic rule one needs to follow is, not to withdraw from debt mutual funds until the holding period of more than 3 years is completed in order to make it tax efficient. 

* For the income for the initial 3 years, required funds should be parked in Liquid and arbitrage funds, which are a better option compared to saving account and a systematic withdrawal plan should be setup from it. 

*Income for 4th year onwards will come from debt mutual funds through systematic withdrawal .. 

Incentive fee

Fee paid as an incentive to the general partner of a hedge fund or, the manager of a mutual fund, the amount of which depends on his/her performance, usually relative to benchmark index. 

This form of compensation could in fact extend to any financial professional, but tends to be most common among people directly responsible for managing funds. 
  Since managers are compensated based on actual results, they will try to get the best results for their clients, but the argument is sometimes made that an incentive fee might encourage the manager to take more risks than he/she otherwise would in pursuit of maximum returns. also called incentive fee.

Mutual Fund- Indian Capital Market

 Capital market regulator Sebi has taken the first step to revive mutual fund houses, twist rules to step up retail participation in IPOs, and made it easier for companies to raise funds and for promoters to dilute stake.

Also, investors will soon be able to apply for shares offered in a public issue online through their stock broker. Electronic issuance of initial public offerings, ore-IPOs as the name suggests, can be done online to save time and reduce the paperwork involved.

But investing in MFs will be become a little more expensive for those in metros and top cities while retail investors could receive more shares in IPOs. Sebi, in its board meeting on Thursday, sketched an incentive formula as per which existing mutual fun investors and those residing in top cities would subsidise new investors from smaller cities and towns.
The regulator has allowed cash transactions in mutual fund schemes to the extent of Rs 20,000 to make investing easier for small investors in rural areas.

Indian capital market still inspires confidence: SEBI

Indian capital market still inspires confidence: SEBI

Not all is gloomy in the current economic environment, at least in the financial terrain, which indicates that the turnaround still holds promise and inspires confidence in the Indian capital markets, says the monthly bulletin by the market regulator.

While funds raised through public issues have fallen more than 94 per cent in the first eight months of the current financial year, money raised through rights issues has climbed up marginally, Securities and Exchange Board of India (SEBI) in its December bulletin said.

It stated that the 18 rights issues during April-November 2008-09 raised Rs 10,627 crore, slightly higher than in the year-ago period.

Funds raised by the corporates through private placement of debt issues have kept pace with that in the 2007-period.

Funds raised in the eight-month period is Rs 86,604 crore, trailing last year's by a mere 2 per cent.

The falling-behind trend, here, has been arrested since October. The last two months in the review period registered a rise of 52 per cent each in terms of amounts raised both on the BSE and NSE against last year.

While net resource mobilisation by mutual funds for the April-November period is negative at Rs 30,530 crore as against last year's positive Rs 1,35,124 crore, the figure for November is a positive Rs 13,789 crore.

However, net investment by mutual funds, which stands at Rs 23,135 crore in April-November period, was more than halved in the last two months of the period as the funds liquidated Rs 28,621 crore, mainly in debt.

Even as foreign institutional investors (FIIs) liquidated Rs 35,730 crore in the current financial year till November, there was a net inflow of foreign funds of Rs 1,616 crore in November, the regulator said.

About investment, it said, there is a clear inclination towards debt instruments than equity, according to the figures reported in the SEBI's bulletin.

In the review period, FIIs liquidated Rs 43,304 crore in equity, whereas invested Rs 7,574 crore in debt. And, mutual funds, in the period, invested Rs 15,610 crore in debt, double of its investment of Rs 7,526 crore in equities.

Besides, last Monday, Commerce Minister Kamal Nath said the foreign direct investment (FDI) of USD 18.7 billion in the first three quarters of the current fiscal year is double than last year.

News Source : Indian capital market still inspires confidence: SEBI

Indian capital market still inspires confidence: SEBI

Indian capital market still inspires confidence: SEBI

Not all is gloomy in the current economic environment, at least in the financial terrain, which indicates that the turnaround still holds promise and inspires confidence in the Indian capital markets, says the monthly bulletin by the market regulator.

While funds raised through public issues have fallen more than 94 per cent in the first eight months of the current financial year, money raised through rights issues has climbed up marginally, Securities and Exchange Board of India (SEBI) in its December bulletin said.

It stated that the 18 rights issues during April-November 2008-09 raised Rs 10,627 crore, slightly higher than in the year-ago period.

Funds raised by the corporates through private placement of debt issues have kept pace with that in the 2007-period.

Funds raised in the eight-month period is Rs 86,604 crore, trailing last year's by a mere 2 per cent.

The falling-behind trend, here, has been arrested since October. The last two months in the review period registered a rise of 52 per cent each in terms of amounts raised both on the BSE and NSE against last year.

While net resource mobilisation by mutual funds for the April-November period is negative at Rs 30,530 crore as against last year's positive Rs 1,35,124 crore, the figure for November is a positive Rs 13,789 crore.

However, net investment by mutual funds, which stands at Rs 23,135 crore in April-November period, was more than halved in the last two months of the period as the funds liquidated Rs 28,621 crore, mainly in debt.

Even as foreign institutional investors (FIIs) liquidated Rs 35,730 crore in the current financial year till November, there was a net inflow of foreign funds of Rs 1,616 crore in November, the regulator said.

About investment, it said, there is a clear inclination towards debt instruments than equity, according to the figures reported in the SEBI's bulletin.

In the review period, FIIs liquidated Rs 43,304 crore in equity, whereas invested Rs 7,574 crore in debt. And, mutual funds, in the period, invested Rs 15,610 crore in debt, double of its investment of Rs 7,526 crore in equities.

Besides, last Monday, Commerce Minister Kamal Nath said the foreign direct investment (FDI) of USD 18.7 billion in the first three quarters of the current fiscal year is double than last year.

News Source : Indian capital market still inspires confidence: SEBI

Indian capital market still inspires confidence: SEBI

Indian capital market still inspires confidence: SEBI

Not all is gloomy in the current economic environment, at least in the financial terrain, which indicates that the turnaround still holds promise and inspires confidence in the Indian capital markets, says the monthly bulletin by the market regulator.

While funds raised through public issues have fallen more than 94 per cent in the first eight months of the current financial year, money raised through rights issues has climbed up marginally, Securities and Exchange Board of India (SEBI) in its December bulletin said.

It stated that the 18 rights issues during April-November 2008-09 raised Rs 10,627 crore, slightly higher than in the year-ago period.

Funds raised by the corporates through private placement of debt issues have kept pace with that in the 2007-period.

Funds raised in the eight-month period is Rs 86,604 crore, trailing last year's by a mere 2 per cent.

The falling-behind trend, here, has been arrested since October. The last two months in the review period registered a rise of 52 per cent each in terms of amounts raised both on the BSE and NSE against last year.

While net resource mobilisation by mutual funds for the April-November period is negative at Rs 30,530 crore as against last year's positive Rs 1,35,124 crore, the figure for November is a positive Rs 13,789 crore.

However, net investment by mutual funds, which stands at Rs 23,135 crore in April-November period, was more than halved in the last two months of the period as the funds liquidated Rs 28,621 crore, mainly in debt.

Even as foreign institutional investors (FIIs) liquidated Rs 35,730 crore in the current financial year till November, there was a net inflow of foreign funds of Rs 1,616 crore in November, the regulator said.

About investment, it said, there is a clear inclination towards debt instruments than equity, according to the figures reported in the SEBI's bulletin.

In the review period, FIIs liquidated Rs 43,304 crore in equity, whereas invested Rs 7,574 crore in debt. And, mutual funds, in the period, invested Rs 15,610 crore in debt, double of its investment of Rs 7,526 crore in equities.

Besides, last Monday, Commerce Minister Kamal Nath said the foreign direct investment (FDI) of USD 18.7 billion in the first three quarters of the current fiscal year is double than last year.

News Source : Indian capital market still inspires confidence: SEBI