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Over the last few years, one topic that I have written about several times is the superiority of fixedincome mutual funds over bank fixed deposits. It’s not an exciting topic; the difference between the best and the worst equity investments available to Indian investors is an order of magnitude higher than the difference between the best and worst fixed income options. So it’s natural that savers don’t have too much interest in the topic. However, that’s not the best way to think about this issue. For better or for worse (in my opinion, worse) India has traditionally been a ‘fixed income country’. Generations of savers turn automatically to savings instruments like PPF, bank deposits, post office deposits etc for all their savings needs. The fact that this is suboptimal is a separate story but even within the fixedincome space, most of us fail to think through things, and still make suboptimal choices.

Investment preference seems to be changing. A survey by UBS Global Research showed that in 2019,ownership has gone up for insurance, post office savings schemes and pension plans compared with equity/debt mutual funds (MFs) and shares, where it has declined. A survey of investors who have a bank account — either savings or current — by global investment bank UBS showed that 47 per cent of those surveyed held a life insurance policy and 33 per cent had ownership of plain-vanilla bank deposits. “As we have been highlighting, the attractive interest rate offered on government-sponsored small saving schemes versus banks’ term deposits is influencing household saving behaviour,” said Gautam Chhaochharia, analyst, and Ms Tanvee Gupta Jain, economist, at UBS Securities.

Retirement mutual fund schemes saw an increase of 24.46% in their total AUM to Rs 10,425.28 crore during April 2019 – Jan 2020, shows Amfi data. As on January 31, 2020, the retirement solution-oriented schemes had 25.42 lakh of folios in 24 retirement funds, as compared to 24.97 lakh as on April 30, 2019 in 21 solutions-oriented schemes. Mutual Fund schemes are emerging as the popular long term retirement avenue, given the robust continuation of SIP contribution reaching at an all-time high of Rs 8,532 crore, by the retail investors, and also the total mutual fund AAUMs recording an all-time high of Rs 28.18 lakh crore.

ICRANSE 1.04 % has downgraded the Indian domestic pharma sector to ‘negative’ from ‘stable’, as the credit rating agency believes the lockout in parts of China following the outbreak of coronavirus will affect Indian pharma companies. Though the majority of the pharmaceutical manufacturing facilities in China are located far away from the coronavirus-affected sites, there has been a disruption in the supply chain due to the lockouts. Considering Indian pharma companies’ dependency on on China for raw materials, a prolonged shutdown of factories might lead to shortage or increase in prices of essential active pharmaceutical ingredients (API).

The historical correlations between various asset classes look disrupted as investors are finding it difficult to price risk to global growth due to the Covid-19 epidemic. The impact of the SARS outbreak in 2003 may not serve as an effective proxy since China’s contribution to the global gross domestic product (GDP) has increased four-fold since then. As a result, investors are turning to safe haven assets to cover economic risks.

Investments into equity mutual funds through systematic investment plans (SIP) have picked up sharply over the last five years with many new investors coming in. The mutual fund industry has 3.04 crore SIP accounts and is adding 9.81 lakh SIP accounts on an average every month in 2019-20. Close to Rs 8,500 crore comes into equity schemes every month through SIPs. According to a report by NJ Wealth, the average SIP return for a basket of 139 diversified equity mutual funds over a wo-year period is 7.52%; while for a five-year period it is 8.59%. ET takes a look at five equity fund schemes that stayed ahead of the pack and where investments through SIPs have delivered a 14% CAGR over the last five years.

The average AUM of overnight mutual fund schemes has grown five times over the last 10 months to Rs 52,524.98 crore as on January 31, 2020 from Rs 11,566.84 crore as on April 30, 2019. The number of folios under overnight funds at 46,763 as on January 31, 2020, have more than doubled in the last 10 months, from 21,363 as on April 30, 2019. Overnight funds within the open-ended debt mutual fund schemes is the newest category investing in debt and money market instruments with overnight funds are considered most liquid and relatively safest debt schemes.

Staying bullish on Indian markets, overseas investors have pumped in a net amount of Rs 23,102 crore in February so far driven by positive sentiment around the budget and RBI's decision to maintain an accommodative stance in the latest monetary policy. According to the depositories data, foreign portfolio investors (FPI) invested a net sum of Rs 10,750 crore into equities and Rs 12,352 crore into the debt segment, taking the total net investment to Rs 23,102 crore between February 3-20.

When it comes to investing in the Indian market, foreign investors (FIIs/FPIs) and mutual funds (MFs) usually take different approaches. Out of a list of 183 mid-cap companies picked by our filter, only 40 companies witnessed an increase in stakes by both FIIs and MFs during the last quarter (September to December 2019). Going a step ahead, we delved deep to identify companies wherein both FIIs and MFs increased their stake at least by 1.5 per cent. Surprisingly, we came across only two such companies wherein both reposed their confidence. Here are them:

Although you can invest in a mutual fund (MF) on any business day of the year, you may not always get the same day's net asset value (NAV). Depending on what time you submit your application, you will be allotted the appropriate day's NAV. Now this could be the NAV of the same day, the previous day or the next day. There are separate rules for liquid funds and equity or debt funds. Here is a look at what the cut-off timings are.

SEBI's categorisation and rationalisation of mutual fund schemes in 2017 created the category of focused funds under equity funds. These funds can invest in a maximum of 30 stocks. The general perception about these funds is that they are more volatile than normal multi-cap funds but are also more rewarding. Is that really so? In order to find the answer, we studied focused funds and their diversified multi-cap counterparts from the same fund houses that have a history of at least one year. We found 11 such cases.

Over the last few years, one topic that I have written about several times is the superiority of fixed-income mutual funds over bank fixed deposits. It's not an exciting topic - the difference between the best and the worst equity investments available to Indian investors is an order of magnitude higher than the difference between the best and worst fixed-income options. So it's natural that savers don't have too much interest in the topic.

Life insurance is not about investing your money to earn a return on it, it’s about financial protection for your loved ones. The most efficient way to do that is through a term insurance policy. You pay only for insurance and after the policy term ends, you don’t get any money back. But on death during the policy term, it pays a huge corpus to the nominees. Look at the premium (cost of the plan) and the claims settlement record of the insurer.

The debt market has seen various changes in the recent past. The sudden spike in retail inflation in December to 7.35% from 5.54% in November has surpassed the Reserve Bank of India’s (RBI) comfort level. In the last monetary policy, RBI put a halt on repo rate cuts, after reducing it by 135 basis points since February 2019, but it maintained an accommodative stance and introduced measures such as long-term repo operations. Renu Yadav asks experts if these changes will impact the performance of debt products, including duration funds, and if investors need to revisit their debt allocation strategy

When it comes to life insurance, Mint has always vouched for term insurance plans, the simplest and cheapest covers available. However, in order to have a unique selling point, these days insurers are trying to make even their term insurance offerings more comprehensive and customized by offering add-ons such as a cover for terminal illnesses and accidental disability. But add-ons only make term plans more complicated for the buyers and may not always work. Such customization may, in fact, defeat the very idea of keeping life insurance simple.