Investing In Target-Date Debt Funds
Dalal Street Investment Journal|April 12, 2021
Target-date funds or target-maturity funds are like index funds or exchange-traded funds (ETFs) and have been structured in a way that will help you grow assets optimised for a specific timeframe. These funds seek to address investors’ capital requirement at a future date. The report provides further insights

When it comes to debt mutual funds the perception of retail investors is that they are risk-free and safe. This is presumed by most retail investors. However, the back-to-back credit rating downgrades of Infrastructure Leasing and Financial Services (ILFS) in 2018, DHFL and Yes Bank in 2019 has compelled investors to change their perception about the safety of debt funds. This year investors have had to alter their viewpoint about return expectation from debt funds. They cannot expect a predictable return from debt funds even through government securities. The returns of long duration funds or funds having higher exposure to long duration papers are in the negative zone. This time it was not credit risk but interest rate risk. All this has certainly been very demoralising for debt fund investors.

Such cumulative events might have led many retail investors to go back to their bank fixed deposits (FD) where they are assured of getting two major things:

1. Assurance of receiving back the invested capital.

2. Getting predictable fixed returns.

But what if we say that you can achieve your financial goals even with target-date debt funds and that too with better returns than your bank FDs, particularly for people in the highest tax bracket? In this article, our effort would be towards helping you understand what are target-date funds, their performance and risk factors, the kind of tax efficiency they provide to investors and how ideal they are for investments.

Understanding Target-Date Debt Funds

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM DALAL STREET INVESTMENT JOURNALView All

The Facts & The Fine Print

Most of us buy life insurance driven by the need of the hour, especially when it is time to get the benefit of tax exemption or in cases like the present one when the world has been gripped in the clutches of the pandemic. This is not an ideal scenario. You must understand the nitty-gritty of an insurance policy before investing in one. The article shows the way

5 mins read
Dalal Street Investment Journal
June 07, 2021

Technology Adoption Key To NBFC Success

After a tough period of survival, the NBFCs are back in the reckoning with improved system liquidity and strong capital buffers that have helped majority of NBFCs to disburse loans

3 mins read
Dalal Street Investment Journal
June 07, 2021

Markets on a Steady Ascent

The current scenario has proved to be a golden opportunity for investors investing in low-risk, high-growth and quality mid-cap and small-cap stocks

2 mins read
Dalal Street Investment Journal
June 07, 2021

Rainwater Harvesting: Need Of The Hour

It is said that World War III will not be fought for geographic dominance but solely on the basis of water. This may sound far-fetched to citizens of more developed countries. However, in India there are already daily battles being waged by areas, projects and individuals for access to this precious resource during summers, writes Santhosh Kumar, Vice Chairman, ANAROCK Property Consultants

4 mins read
Dalal Street Investment Journal
June 07, 2021

Global Markets On A Roll

While the current rally is too fancy to last for long, cautiousness about sharp corrections may create a volatile stretch until the next earnings seasons

2 mins read
Dalal Street Investment Journal
June 07, 2021

Cotton Weaves Its Way To The Top

Meanwhile, concerns about increasing inflation hovering on the horizon and also the strengthening of the rupee led the gold prices to trade strong in the domestic market

1 min read
Dalal Street Investment Journal
June 07, 2021

Are Quant Funds Worth The While?

In this article, we will focus on defining quant funds, how they work and whether or not you should have them in your investment portfolio.

4 mins read
Dalal Street Investment Journal
June 07, 2021

The Art Of Selecting A Financial Product

Most people invest with little or no in-depth analysis or study. What are the factors that must trigger your investment? The article provides guidelines from an investment product perspective and can be used for buying any financial product, including your insurance. Keeping all these points in mind while selecting your financial product will help you to improve your chances of generating wealth

6 mins read
Dalal Street Investment Journal
June 07, 2021

Small-Cap Small In Size, Big In Gains

With the Nifty touching all-time highs and surprising market participants with tremendous gains in 2020 and 2021 alike, it is the category of small-cap stocks that is actually making a difference in an investor’s portfolio by not only outperforming Nifty in the past one year but by also delivering a broad-based market rally, thus allowing a majority of the investors to book profits. Yogesh Supekar highlights the trend in the smallcap universe while also focusing on the top-quality performers in the small-cap space

7 mins read
Dalal Street Investment Journal
June 07, 2021

Finding A Way To ‘Heavenly' Profits

Riding on the digital wagon that has influenced equity investing among the millennials, the company has been able to garner 398 million digital impressions in June 2020 on various online and digital platforms through the application of digital marketing. Its customer outreach spans across approximately 96.87 per cent or 18,649 pin codes in India as of June 30, 2020, which is evidence enough of its growth curve

5 mins read
Dalal Street Investment Journal
June 07, 2021
RELATED STORIES

डीएचएफएल के लिए पीरामल को मंजूरी

राष्ट्रीय कंपनी विधि न्यायाधिकरण (एनसीएलटी) के मुंबई पीठ ने वित्तीय दिक्कतों से गुजर रही दीवान हाउसिंग फाइनैंस लिमिटेड (डीएचएफएल) के लिए पीरामल समूह की समाधान योजना को आज मंजूरी दे दी। डीएचएफएल वर्ष 2019 से दिवालिया प्रक्रिया से जूझ रही है।

1 min read
Business Standard - Hindi
June 08, 2021

डीएचएफएल को 97 करोड़ रुपये का शुद्ध मुनाफा

दीवान हाउसिंग फाइनैंस लिमिटेड (डीएचएफएल) ने मार्च में समाप्त चौथी तिमाही में एकल आधार पर 97 करोड़ रुपये का शुद्ध लाभ अर्जित किया है जबकि पिछले वित्त वर्ष की समान अवधि कंपनी ने 7,634.89 करोड़ रुपये का नुकसान दर्ज किया था।

1 min read
Business Standard - Hindi
June 07, 2021

वधावन के प्रस्ताव पर करें विचार

एनसीएलटी ने कहा, ऋणदाताओं के समक्ष पेश करें कपिल वधावन की पेशकश

1 min read
Business Standard - Hindi
May 20, 2021

Should you invest in target maturity passive debt funds?

In recent times, fund houses like Edelweiss, Nippon and IDFC have launched target maturity debt funds. What is interesting is that these are all passive funds –index funds or exchange-traded funds (ETFs).

3 mins read
Investors India
April 2021

BE PREPARED FOR EQUITY MARKET VOLATILITY IN 2021 AS WELL

2020 was a year marked by extreme volatility. From 41,306 at the start of the year, the BSE Sensex plunged to 25,981 on March 23 as the pandemic-induced lockdowns began.

6 mins read
Investors India
January 2021

Piramal Wins the DHFL Battle

The home finance company is key to his future plans in the financial sector, but the billionaire entrepreneur may have to wait longer to actually take over the troubled lender.

2 mins read
Fortune India
February 2021

Inside The DHFL Deal

Brand familiarity and better relations with bankers and stakeholders tilted the balance in favour of Ajay Piramal, and against Oaktree Capital

4 mins read
Forbes India
February 12, 2021

डीएचएफएल पर फंसेगा कानूनी पेच!

• ओकट्री के अनुसार कर्जदाता उसके 2,700 करोड़ अधिक रकम वाले प्रस्ताव पर नहीं कर रहे विचार • कंपनी के अनुसार उचित बाजार मूल्य के लिहाज से उसका प्रस्ताव 4,500 करोड़ रुपये अधिक है • डीएचएफएल के बीमा उद्यम में ओकट्री को नहीं मिलेगी हिस्सेदारी लेने की अनुमति

1 min read
Business Standard - Hindi
January 08, 2021

Hungry For Stressed Assets

Private equity and stressed asset funds continue to show interest in acquiring value assets undergoing insolvency proceedings despite delays and litigation

8 mins read
Business Today
December 27, 2020

डीएचएफएल की रिटेल बुक के लिए पीरामल ने प्रस्ताव में किया बदलाव

पिछले शुक्रवार को पीरामल समूह ने अदार्ण के संशोधित प्रस्ताव के संबंध में आपत्ति जताते हुए डीएचएफएल की सीओसी को पत्र भेजा था।

1 min read
Business Standard - Hindi
November 18, 2020