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A whole new way of looking at debt funds

Sunil Jhaveri (Mr. Bond), MSJ Capital, Gurgaon

18th August 2016

In a nutshell

Think back to March 2016 - when SBI led the PSU bank pack's shares downhill. Many fretted at the damage it was causing to some equity fund NAVs. Savvy advisors however used exactly this extreme opportunity to give a tactical buy call into the same funds and into banking sector funds, convinced that the market's excesses have created a great buying opportunity. This call, like so many such contrarian calls taken at times of market excesses, has worked very well for investors. Doing this in the equity funds space is something advisors are familiar with. What Mr. Bond explains in this video is a case of applying the same paradigm in debt funds. The recent JSPL episode was seen as an avoidable credit accident by most, but Mr. Bond argues that for new investors, there is perhaps a good buying opportunity in funds that are exposed to JSPL's debt, at its current beaten down valuation. He takes the example of one such scheme to elaborate the broader point : its time for advisors to discover a whole new way of looking at debt funds. Just as advisors have become savvy in the equity funds space, its time to apply the same skills in the debt funds space as well.

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