Oct 2023 Moneycontrol
As I does not expect any reduction in interest rate in FY2023-24 and recommends investments in short-duration funds.
As I does not expect any reduction in interest rate in FY2023-24 and recommends investments in short-duration funds.
Issuance of such long-dated government securities and acceptance by the investing community indicates growing confidence in the economy of a country.
Hardly any PSU or private sector AAA-rated secured bonds offer 8 percent returns.
“These NCDs give you an opportunity to earn 50-100 basis points more than bank deposits and other AAA-rated products”.
Investors should not expect a major shift in interest rates in the near future.
Conservative fixed-income investors primarily into bank and postal deposits can consider a small allocation to the non-convertible debentures (NCDs) of Power Finance Corporation (PFC) given its government backing and AAA rating.
There are expectations that the RBI may soon start giving dovish signals.
He finds a lot more value in short-term papers maturing in one year than their longer-term counterparts.
Shift part of portfolio to longer-duration funds when inflation moves sustainably close to RBI’s target level
As the yield curve is flat, investors are better off investing in short-term bonds maturing in one to three years or mutual fund schemes that invest in such papers.