The change in debt fund taxation earlier this year has nudged fund houses like Kotak Mutual Fund to launch asset allocation funds with an equity tax advantage. The funds invest in multiple asset classes and then switch between them, depending on the fund manager’s strategy to ride market volatility and opportunities it presents.
Power Finance Corporation (PFC) has launched the Tranche I Issue of non-convertible debentures (NCDs) with a base issue size of INR 500 Cr ($66m) and a green shoe option of up to INR 4,500 Cr, totaling INR 5,000 Cr. The debentures are rated AAA by ICRA, CRISIL, and CARE and have tenures of 3, 10, and 15 years
"After three years of high returns, investors need to be cautious. They need to have a five-year view and should only invest in a staggered manner using the SIP route," said Abhay Mathure, a Mumbai-based mutual fund distributor.
While IIFL is an established company and the NCDs offer a high rate of return along with regular income, it is paramount that you understand risks related to NCD investments, for returns are not guaranteed.
If the proposal goes through, commissions are expected to fall by 25 to 50 bps. Low commissions may see new entrants change their minds, or become a sub-broker of a large national distributor.