INSUBCONTINENT EXCLUSIVE:
MUMBAI: The prevailing stress in debt mutual funds is prompting investors to put incremental money into fixed deposits and non-convertible
Investment advisors say fixed deposits and NCDs of top-rated NBFCs are seeing higher inflows these days than last year with returns from
various debt mutual funds taking a knock due to ratings downgrades of securities and defaults.
Fixed deposits with AAA rating such as HDFC
Ltd, LIC Housing Finance, Bajaj Finserv and Mahindra Finance, which fetch returns between 8% and 9%, are among the top picks
Senior citizens can earn anywhere around 10-50 basis points extra
Investors have also put some money in recent NCDs issues of LT Finance, Shriram City Union.
Over the last one year, debt mutual fund schemes
have written off their investments in ILFS, resulting in NAVs or net asset values of these schemes eroding
companies last week, which has led to losses in some debt mutual fund schemes, has exacerbated the worries
distributor of financial products in Mumbai.
Bhaiya said debt portfolio of investors is far bigger than equity and this trend could change
the last one year, returns from debt mutual funds have been volatile
Many schemes which held bonds of ILFS have eroded investor returns for an entire year
As per Value Research, the liquid category has returned 6.92%, Ultra short term category 6.2%, credit risk category 5.08% and dynamic bond
These returns have been lower when compared to AAA rated company FDs and secured NCDs.