Category: Market Alphabets

Is it the Right Time to go for International Funds?

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Is it the Right Time to go for International Funds?

SEBI vide their circular dated 05/11/2020 had permitted the Mutual Funds to make overseas investments subject to a maximum of US $ 600 million per Mutual Fund, within the overall industry limit of US $ 7 billion.  The regulator’s move was an opportunity for the investors interested to start investing in segments across the world having reasonable or low valuations. International Funds are basically mutual funds which invest in companies located outside the investor’s country of residence. By investing in a global fund, investors get the chance to be a part of a much more extensive and diverse portfolio with the help …

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How Do FII Investments affect the Indian Equity Markets?

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How Do FII Investments affect the Indian Equity Markets?

Institutional investors for any country can be both External Investors (Foreign Investors) and Internal Investors (Domestic Investors). When the Indian Government opened its doors for foreign money into the Indian Stock market, they were named Foreign Institutional Investors (FII), commonly known as FIIs. To further reduce time and rationalise the process, the Indian Government introduced new Foreign Portfolio Investor (FPI) regulations in 2014, which were then implemented by the Securities Exchange Board of India (SEBI). FII can be referred to as a single foreign investor or a group of foreign investors. FPI invests in securities/stocks in other countries. In India, they can …

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How do Interest Rates affect Bond Prices and Bond Yields?

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How do Interest Rates affect Bond Prices and Bond Yields?

In a surprise move, the RBI has hiked the Repo Rate (the rate at which commercial banks borrow money by selling their securities to the RBI to maintain Liquidity) by 40 bps to 4.40% on 04/05/2022. Along with the hike in Repo Rate, RBI has also increased the Cash Reserve Ratio (CRR – The % of a bank’s total deposit maintained with the Central Bank) by 50 bps to 4.50%. The hikes in Repo Rate and CRR will drain around 87,000/- crore of liquidity from the banking system. The RBI controls inflation (Inflation = When too much money chasing too few goods) by increasing …

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The Basic Things You Need to Know about Bonds

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The Basic Things You Need to Know about Bonds

It’s highly unlikely that you haven’t heard the term ‘bond’ if you are an active investor. Bonds are investment vehicles that come under the fixed income asset class universe. The Indian bond market is much bigger than the ubiquitous equity markets. In today’s blog, we’ll discuss the basics of bonds, types and how you can invest in them. What is a Bond? Bonds are similar to loans. You pay the borrower a fixed sum of money, and they promise to pay you back. That’s at the crux of bonds. Bonds are issued by the Government or corporates when they are in need …

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3 things you must know about the Repo Rate

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3 things you must know about the Repo Rate

Earlier this week, RBI conducted an off-cycle MPC (Monetary Policy Committee) meet and announced a 40 basis points (0.4%) repo rate hike on Wednesday to calm inflationary pressures. The hike is the first since August 2018, and the new Repo Rate now stands at 4.4%. Also, this was an unscheduled meeting of the MPC, the first of its kind held to increase rates. The committee usually meets six times in a financial year, i.e., every two months. The monetary policy determines the quantity of money available in the Indian economy and the mediums through which the money is supplied. The …

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5 things you should know about Public Provident Fund

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5 things you should know about Public Provident Fund

In the last blog, we talked about the basic features of PPF, its return profile and how you can open a PPF account. PPF has been an attractive investment option for long because of its safety aspect and tax treatment. It serves as an ideal investment avenue for risk-averse investors planning long-term goals that are at least 15 years away. The scheme can also serve as a safer diversification tool into the debt asset class for your overall portfolio. Essentially, it fits differently for each individual, depending upon their goals and portfolios. Today we’ll touch upon the five aspects of this …

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How to Invest in Foreign Stocks from India?

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How to Invest in Foreign Stocks from India?

Diversification is at the core of investing principles. It helps you minimise portfolio risk and maximise your investment return over time. Investing globally is one of the best ways to do that. Additionally, taking exposure to different asset classes worldwide helps you reap the benefits of great investment opportunities and invest in some of the world-renowned companies. Is there an easy way to do that sitting in India that too through a single medium? Your answer is India INX. India INX is regulated by the International Financial Services Authority (IFSCA) and offers you 22-hour trading in a range of financial …

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How are SIPs taxed?

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How are SIPs taxed?

Systematic investment plans (SIP) are one of the best ways for investors to start their journey in the capital markets. You can start small, make the most of market volatility, and grow your wealth gradually in the process. There is nothing not to love about SIPs. In this week’s blog, we will look at how your systematic investments are taxed. By understanding the tax implications on your mutual fund investments, you will be able to make the most out of your returns by timing your investments and exits. To begin, the capital gains on the sale of your mutual fund investment can either attract a short-term capital …

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How to be a Smart Investor by understanding these 5 Behavioral Biases

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How to be a Smart Investor by understanding these 5 Behavioral Biases

Investing isn’t all about number crunching and rigorous analysis. Although they play a vital role in helping us make investment decisions, it’s important to remind ourselves from time to time of our limitations in behaving rationally all the time. We are humans and often rely on simple, superficial judgments and analyses when faced with a seemingly complex decision. It may even seem that we are doing our best and taking everything into account, but we may be utterly oblivious to biases and cognitive errors behind the scene. These errors & biases can be costly and not give you the result you were hoping …

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Corporate Actions & their Taxation: All you need to know

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Corporate Actions & their Taxation: All you need to know

In the last blog, we discussed the common corporate actions, the reasons a company may carry those out, and the implication on shareholders. In this piece, we will be breaking down corporate actions through the taxation angle. If you haven’t read the first blog in this series, please click here to read the same. Before we begin, let’s take a minute to understand how equity shares are taxed. You can either incur capital gains or a capital loss on the sale of your equity shares (Profit/Loss on the sale of your shares). The capital gains are calculated by deducting the purchase cost from the sale value. The taxes are levied on these …

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