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Fundamentals of Fixed Income Investments
Fixed Income Mutual funds taxation for the financial Year 2016-2017 Capital Gains Taxation Long Term Capital Gains – Units held for more than 36 months Short Term Capital GaiRead More
09 Dec 2016
Accrual is the accumulation of interest from fixed income securities that a portfolio holds. Liquid funds, FMPs are example of accrual funds. Accrual funds do not focus on rise orRead More
09 Dec 2016
The Fixed Income Growth Portfolio Fixed income portfolios have two components that generate returns. One component is the accrual component and the other component is the capital gRead More
25 Nov 2013
The universe for building a fixed income portfolio is small, unlike stocks. However within the small universe it is important to build and maintain a fixed income portfolio that reRead More
22 Nov 2013
Fixed Income Market Indices A market index tracks the performance of a specific basket of assets considered to represent a particular market or sector of the economy. Fixed Income Read More
15 Oct 2013
Repo (Repurchase Option) transactions in India take place in Government Securities, Treasury Bills and State Development Loans (SDL). Repo in corporate bonds is permissible but theRead More
02 Apr 2013
What is Repo? Repo (Repurchase Option) is a formal agreement between two counterparties where one party sells securities to another party with the explicit intention of buying backRead More
11 Mar 2013
Corporate bonds are assigned credit ratings by rating agencies.Credit ratings range from the highest safety that is AAA to default category that is D. In between the highest and thRead More
29 Jan 2013
The FIMMDA F-TRAC Screen gives the yields at which corporate bonds are traded in the market. The screen below shows the corporate bonds traded on the 27th of December 2012. In the Read More
09 Jan 2013
In this tutorial we will look at all the factors that drive the Indian government and corporate bond yield curves. Chart 1 shows the slope of the Indian government bond and AAA raRead More
26 Sep 2012
The yield curves in Japan and Germany are also upward sloping but they do not necessarily indicate economic growth or inflation. Let us look at the reasons for the upward slope in Read More
12 Sep 2012
In the last tutorial we saw that the yield curve in India and a few European countries were inverted at points of time and we analysed the reasons for the same. The government bondRead More
19 Aug 2012
Factors driving yield curve shapes The normal shape for a yield curve is upward sloping, however there are numerous instances where yields curves are inverted or even flat. India aRead More
14 Aug 2012
The interest rate environment is said to be stable when government bond yields move in a reasonably narrow range and the yield curve is normal. See yield curves. In such times of sRead More
10 Aug 2012
Yield curves plot the yield and maturity of fixed income securities that have similar characteristics and similar credit risk profiles. Government bond yield curves plot governmentRead More
24 Jul 2012
Duration gives the approximate percentage change in a bond’s price to change in interest rates. A duration of 6.5 years for a ten year bond suggest that for every 100bps change in Read More
11 Jul 2012
Interest rate environment is dynamic and knowing where to invest in a particular interest rate environment is important for the performance of your fixed income investments. We havRead More
05 Jul 2012
Deep Discount Bond (DDB) / Zero Coupon Bond (ZCB) Deep discount bonds and zero coupon bonds are similar in the sense that both the instruments do not pay coupon interest. Instead tRead More
26 Jun 2012
The characteristics of corporate bonds in India differ from that of government bonds. Corporate bonds usually have annual coupons while government bonds have semi annual coupons. CRead More
07 Jun 2012
In the last tutorial we learnt that government bond pay interest on a semi annual basis. An example of a government bond paying semi annual interest is as follows: Nomenclature: 8.Read More
22 May 2012
Government bonds are fixed income securities issued by the Government of India (GOI). Government bonds have the following characteristics: Face Value, maturity date, coupon, coupoRead More
07 May 2012
The yield curve is the plotting of yields of securities of similar credits with different maturities. A highly liquid and AAA rated corporate bond yield curve should be upward slopRead More
27 Apr 2012
RBI Monetary Policy The Reserve Bank of India (RBI) is the monetary authority of the country. RBI sets the monetary policy with the objectives of price stability, economic growth aRead More
23 Apr 2012
Why does liquidity go up and down? What are the factors affecting liquidity and how do these factors affect liquidity? In the last tutorial we saw that the factors affecting liquidRead More
09 Apr 2012
Debt securities are classified on maturity, coupon and credit. Taking each by turn: Maturity Maturity is the time to redemption or repayment of the principle of a debt security. DeRead More
06 Feb 2012
Interest rates are a function of demand and supply. If demand for government bonds are higher than supply of government bonds interest rates on government bonds will fall and vice Read More
05 Jan 2012
Greece credit rating is in default category Greece is in the news on likely default on its debt. The rating agencies have cut Greece rating to default category, with S&P ratingRead More
19 Oct 2011
In this tutorial we will take a closer look at the credit downgrade of SBI, which will help you in better understanding of the concept of credit risk. SBI credit rating downgraded Read More
07 Oct 2011
Credit risk is the risk of default by an issuer of a bond. Bonds issued by any other entity apart from the government are termed as corporate bonds. Government bonds do not carry cRead More
21 Sep 2011
Let us take the example of the SBI (State Bank of India) bond. The bond is rated AAA which is the highest safety rating given by rating agencies. The terms of the bond are Issuer: Read More
23 Aug 2011
Let us take an example of a three year SBI (State Bank of India) bond. The bond is rated AAA, which is the highest safety rating given by rating agencies. The terms of the bond areRead More
04 Aug 2011
We learnt about the concepts of fixed income in the first tutorial by taking an example of a simple fixed deposit. You placed a principle of Rs 100 in a three year maturity fixed dRead More
19 Jul 2011
Face Value: The face value of a bond is also known as par value or principal amount. It is basically the amount of money a holder will get back once a bond matures. A newly issued Read More
10 Jul 2011
