Transcript of Chat with Mr. Milind Nandurkar (Senior Fund Manager - Fixed Income,Sun F&C Mutual Fund .) - Debt Funds : Can they repeat last year's performance - (5/04/2002)
[04:29:12 PM] => Myiris: Welcome to the live chat session Mr Nandurkar
[04:30:29 PM] => Myiris: Our guest today is Mr.Milind Nandurkar
[04:32:09 PM] => Myiris: Mr. Milind Nandurkar is the Senior Fund Manager-Fixed Income of Sun F&C Mutual Fund.At the time of this conversation / chat, Mr. Nandurkar may or may not have positions in the stocks mentioned below, although holdings may change at any time. The views expressed by Mr.Nandurkar is based upon information that he considers reliable, but does not represent that it is accurate or complete, and it should not be relied upon as such. Mr.Nandurkar, his company and its affiliates, officers, directors, partners, and employees may, from time to time, have long or short positions in, buy or sell and deal as principal in the securities, or derivatives thereof, of companies mentioned herein and may take positions inconsistent with the views expressed.
[04:33:15 PM] => None of the information contained herein constitutes, or is intended to constitute a recommendation of any particular security or trading strategy or a determination that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. You should consult with and rely upon your own advisors whether and how to use such information in making any investment decision.
[04:34:32 PM] => Lastly the views expressed by Mr.Nandurkar have no bearing whatsoever with that of IRIS Ltd. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website www.myiris.com
[04:35:47 PM] => Myiris: Welcome to the live chat session
[04:37:08 PM] => Ravindra.Rao :Would debt funds give more returns than bank deposits post tax?What are the advantages of debt mutual funds over traditional bank deposits?
[04:39:21 PM] => MN: Debt funds should give more returns than bank deposits over next year on post tax basis. Diversification of the credit risk, liquidity to open end structure, transparency in operation, advantange of active portfolio management and benefit from pooled investment are some of the advantages of debt mutual funds over traditional bank deposits.
[04:41:39 PM] => Bhaskarreddy:What kind of returns can investors expect from income funds over the next 6 months to 1 year?
[04:43:59 PM] => MN: It is very difficult to predict returns as markets can be volatile. However, it is expected that the returns should be better than banking deposits over a period of one year.
[04:45:41 PM] => Pushpa:What factors should investors take into account while investing in debt and gilt funds in the current scenario?
[04:49:03 PM] => MN: We have witnessed huge rallies in gilt and debt markets over last two to three years. Interest rates are at all time lows. In this scenario one needs to be cautious about the interest rate risk one is taking on when investing in debt or gilt funds. More conservative approach is recommended. Funds with lower average maturity/duration may be preferred.
[04:50:57 PM] => Bond007:What are the new schemes that SUN F&C plan to launch this year?
[04:54:39 PM] => MN:We are planning to launch a fixed income securities fund which will give investors option to invest according to his appetite for interest rate risk. This fund will have a short/medium/long term investment options. We are also planning to launch a plan under this fund which will invest exclusively in foreign fixed income securities. A gilt fund is also on the cards during the year.
[04:55:55 PM] => Aysha:Can you elaborate on the suitability of various debt products for investors having different investment time horizons?
[04:56:55 PM] => MN: For short term investments cash management products and short term debt plans are recommended. If your investment horizon is 6 months to one year, you may look at bond funds or gilt funds. For those investors who do not want to take any interest rate risk fixed maturity plan is a suitable option.
[04:58:45 PM] => shivangip:What is your outlook on debt markets going forward?
[05:02:06 PM] => MN: The nominal interest rate is at all time lows. The liquidity in the Indian Money Market continues to be ample. The corporate credit pick-up is not showing signs of significant recovery. Hence, there is little reason to believe that the interest rates will go up very soon. However, internationally the rate seem to have bottomed out. U S Federal Reserve has changed stance on interest rates from softening to stable. International crude oil prices are also firming up in the face of tensions in the Middle East. In this scenario big downward movement in bond yields looks difficult. Hence the interest rates may remain range bound.
[05:05:18 PM] => Hemlata:What factors should investor take into account while investing in debt funds?
[05:06:36 PM] => MN:His investment horizon , risk appetite has to be decided first. Then, one can choose what kind of funds to invest into as mentioned in earlier answer. While choosing debt fund one should look at the average portfolio maturity, Government Securities percentage holding, credit quality of the portfolio.
[05:07:52 PM] => Ayna:Various private sector foreign players have announced plans to enter the Pension Fund business once it is opened?
[05:15:26 PM] => neyha:Currently what percentage of the average daily lendings can mutual funds lend in the call money market?
[05:16:14 PM] => MN: The limit had been set last year as 85% of average lending in the previous year. That limit continues till date.
[05:17:17 PM] => Nishita:With sentiment with regard to the interest rate outlook positive, do you see activity by mutual funds picking up in the corporate debt market?
[05:20:35 PM] => MN: Yes.
[05:23:20 PM] => sanjay555:With the yield on the new 10 year paper being fixed at 6.85 per cent, what effect would you see this having on the g-sec market?
[05:26:13 PM] => MN:Do not expect the prices to rally because of this cut off yield. The prices have already run up in the run up to the auction.
[05:27:40 PM] => ashokan:Do you think the uniform price based auction has resulted in lower yields in yesterday\'s auction (10 year and 7 year government paper )?
[05:28:54 PM] => MN - Yes.
[05:29:45 PM] => Sunildutt- Do you see corporate debt issuance picking up in the near term?
[05:30:26 PM] => MN- Yes.
[05:31:22 PM] => anandmadhavan- With liquidity ample in the market do you see a pick up in corporate debt issuance in the near term?
[05:31:54 PM] => MN- Yes.
[05:32:38 PM] => jasmine:what is the outlook for the corporate debt market (secondary market) for the month?
[05:34:25 PM] => MN- We expect corporate bond market to post good gains during the month. The volumes are also likely to be good. As mutual funds become more cautious in the portfolios in the debt market they should move some part of the government securities holding into the corporate debt market.
[05:36:10 PM] => Mona:what is the appropriate debt investment vehicle for short term investment?
[05:37:44 PM] => MN- Answered earlier.
[05:38:20 PM] => choclate: Which is the most traded G-Sec paper?
[05:39:33 PM] => MN- 11.5% 2011.
[05:40:31 PM] => June: What impact the NSE terminal for trading of debt is having on the market
[05:41:33 PM] => MN- Nil.
[05:42:01 PM] => Swati: What gains the mutual funds can expect in the short term?
[05:42:46 PM] => MN- Answered earlier.
[05:43:57 PM] => Neyhammartis: How do you see the NDS effecting trade in the g-sec market?Do you feel that this will lead to greater efficiency in the g-sec market?
[05:44:58 PM] => MN- As of now there is no impact. In future we expect better efficiency as information decimation becomes faster.
[05:45:46 PM] => Bhaskar: There has been talk of linking the NDS with the stock market, do you see this happening in the near future?
[05:46:22 PM] => MN- It may happen but will take time.
[05:47:17 PM] => Meghna: Is there a high correlation in the trading activity between g-secs and corporate papers?
[05:47:58 PM] => MN- There is some positive correlation.
[05:48:59 PM] => Abhishek: The 11.50 per cent 2011 security touched an all time low of 7.13 per cent yesterday, do you see the yield falling further to realign with the yields on the recently auctioned securities?
[05:49:31 PM] => MN- Not immediately.
[05:50:19 PM] => Raj: On what basis are the spreads between corporate papers and similar maturity g-secs calculated?
[05:50:59 PM] => MN- Corporate spread = yield on corporate paper minus yield on government security of similar maturity
[05:51:19 PM] => Archana: What is the Average maturity of your debt funds?
[05:51:38 PM] => MN- 5.09 years.
[05:51:57 PM] => Kamesh: Do you actively churn your portfolios?
[05:52:15 PM] => MN- Yes.
[05:52:40 PM] => Sunil: Is the party going to continue for debt funds this year?
[05:53:02 PM] => MN- Answered earlier.
[05:53:40 PM] => Myiris : That�s the end of the chat session for today
[05:54:01 PM] => Myiris : We thank you all for logging on
[05:54:27 PM] => Myiris : Our thanks to Mr Nandurkar for sparing time to come on the chat session
[05:54:45 PM] => Myiris : We�ll bring you more on Myiris chat masala
[05:55:12 PM] => Myiris : Till then its bye from us
