Akshaya Tritiya has become synonymous with gold buying. You can use the occasion to add gold to your portfolio. According to investment advisors, investors should have a 5-15% allocation to gold, depending on their preference for the yellow metal.
Debt returns have been rather depressed, with rates plunging to record lows. So, how does one earn more from this asset class – at least more than the headline inflation rate? One way to do this is to buy into MLDs (market-linked debentures), now offered by the likes of Piramal Finance or Shriram Transport Finance.
Mutual funds could stay away from buying new issuances or existing papers that would have a call maturity beyond March 2023 after the Securities and Exchange Board of India’s revised guidelines still left a gap between the suggested and market valuations of these instruments.
Depending on the quantum of selling, yields on bank perpetual bonds could surge 50-100 basis points. The spike will be even higher in the case of NBFC perpetual bonds.
Investment trusts are finding few takers as yields on these debt-like instruments barely match the risks associated with them when compared with risk free returns from government or triple A rated bonds.
If RBI is able to address the issue of liquidity and ease of investing through the new platform, we can have a vibrant market for all stakeholders.
Retail investors looking for high yield on their fixed income investments typically find investments in government bonds unattractive.
Understanding of GILTS, conversion from SGL to demat and vice versa is cumbersome, liquidity for retail lot (anything less than 5 crore is odd lot) and low yield or return compared to other AAA-rated or PSU or private sector NCD are some of the issues.
Government-owned Power Finance Corporation is set to launch its public bond sale for retail investors on Friday offering up to 7.5%. The issue seeks to garner Rs 5,000 crore.This is the first such issuance since the State Bank of India had floated a public offer about a decade ago. About fourth-fifth of the issuance is earmarked for retail and wealthy individual investors. Subscriptions close January 29.
Wealthy individuals are buying long-term government bonds with 15-to-30 year maturities as they offer returns nearly double of the available short-term securities, including Treasury Bills and other money market instruments.