Transcript of Chat with Mr. Rajiv Anand ( Head Investments, Standard Chartered Mutual Fund) - Debt funds - Still the best bet? (07/01/2002)
[04:24:36 PM] => Myiris : Welcome to myiris chat session.
[04:28:49 PM] => Myiris: Our guest today is Mr. Rajiv Anand, Head Investments - Debt, Standard Chartered Mutual Fund.
[04:30:54 PM] => DISCLAIMER
[04:32:05 PM] => Mr. Rajiv Anand is the Head Investments, Standard Chartered Mutual Fund. At the time of this conversation / chat, Mr. Anand may or may not have positions in the stocks mentioned below, although holdings may change at any time. The views expressed by Mr. Anand 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. Anand, 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.
[04:35:09 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.
[04:35:41 PM] => Lastly the views expressed by Mr. Anand 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.
[04:36:22 PM] => Welcome to the chat session Mr. Anand.
[04:37:26 PM] => Patil_vivek : Sir, Do you think debt funds can manage to sustain their performance in the new year?
[04:38:03 PM] => RA : Debt funds returns last year were abnormal. Returns this year will be more realistic.
[04:40:16 PM] => ShenaiN : When do you see a reversal in the interest rate trend?
[04:40:48 PM] => RA : We really do not any serious reversal in interest rates during the year barring event driven corrections.
[04:43:32 PM] => Raghu : Are people moving out of debt to equity?
[04:45:50 PM] => RA : The biggest benefit is the tax arbitrage that debt funds offer vis a vis bank deposits.
[04:46:08 PM] => Gupta_S : Where do you think the economy is headed?
[04:46:49 PM] => RA : Indications are that the economy has bottomed out and hence we should see a reasonable recovery during the year.
[04:47:20 PM] => Vinod : Can you tell me something about your funds? What have been the returns like?
[04:48:04 PM] => RA : Standard Chartered Mutual fund runs various schemes across the risk matrix of debt. The flagship fund Grindlays Super Saver income fund-Investment plan is a scheme suited for the long- term investors.
[04:48:22 PM] => Grindlays Super Saver income fund-short term is an intermediate scheme suited the investor with a 1 to 6 month investment horizon. Grindlays cash fund is a scheme to optimise the returns from day to liquidity akin to a savings account.
[04:48:57 PM] => MF23 : What is your outlook on YTMs in the debt market?
[04:49:18 PM] => RA : The interest rate outlook in the near term looks stable with a downward bias. We could see the benchmark 10-year GOI YTM go down to 7.50% pa from the current 7.90%.
[04:49:40 PM] => MF23 : How do you see the Gilt price movements in the coming year?
[04:51:28 PM] => RA : The interest rate outlook in the near term looks stable with a downward bias. We could see the benchmark 10-year GOI YTM go down to 7.50% pa from the current 7.90%.
[04:52:38 PM] => Nilesh : Do you expect any heightening of industrial activity in the near future? What about the liquidity situation?
[04:54:10 PM] => RA : Indications are that the economy has bottomed out and hence we should see a reasonable recovery during the year. Liquidity in the system is comfortable to take care of the large borrowing program as well as any uptick in credit demand.
[04:55:52 PM] => Anita : Please tell me about the returns of Grindlay's super saver income scheme?
[04:57:12 PM] => RA : GSSIF-IP finished the year 2001 with returns of 18.42%. Past performance is not indicative of future returns.
[04:57:32 PM] => NG76 : How would you rate your fund's performance vis-a-vis other competitors?
[04:58:15 PM] => RA : The 1- year returns of the flagship fund Grindlays super saver income fund - Investment plan were ranked third. (Source: Value research)
[05:01:16 PM] => B Reddy : Isn't it better to invest in FDs?
[05:02:36 PM] => RA : FD�s are fixed rate instruments where the return is known as compared to debt mutual fund returns are "floating". The biggest benefit debt mutual funds have over FD�s is the tax arbitrage that debt MF�s provide vis-a-vis FD�s.
[05:03:22 PM] => AM : Does it make sense to invest in income funds rather than gilt funds considering the soft interest rates?
[05:05:37 PM] => RA : Each of the asset classes have their advantages as well as disadvantages. Gilt by definition has no credit risk but are a lot more volatile than income funds. Income funds are typically invested 60% in high quality corporate bonds. These typically carry a yield of approx 125bp better than gilts. This provides higher yields in a stable interest rate environment while buffering the fall in a rising rate environment.
[05:06:09 PM] => Srinivas : Are Indian interest rates too high compared to the rest of the world?
[05:07:38 PM] => LPK : Do you invest in bonds? What returns do you expect, sir?
[05:08:16 PM] => RA : Standard chartered Mutual fund is the only focussed debt house in the country with its entire corpus of approx Rs 3000 crores invested in debt.
[05:09:06 PM] => R. Agarwal : What do you think of RBI intervention in bond markets?
[05:09:47 PM] => RA : RBI has done a wonderful job in the last year to stabilise the market as well as temper the exuberance in the market.
[05:10:10 PM] => KBC : How is your portfolio spread?
[05:11:22 PM] => RA : GSSIF-IP is invested 36% in gilts, 59% in high quality corporate papers with the balance in cash/ current assets.
[05:12:28 PM] => Rajaram : How much returns do you expect from your debt funds this year?
[05:12:53 PM] => Suhas : What's your take on yields in the coming quarter?
[05:13:44 PM] => RA : The interest rate environment in the current quarter is expected to stable with a bias towards lower interest rates.
[05:14:17 PM] => SN23 : Do you expect any government cuts on PF/Small Savings scheme?
[05:15:14 PM] => RA : It is likely that the government will accept the recommendations of the YV Reddy committee which has said that PF/small savings rates should be market linked. If that happens we could see the rates coming down by about 100bp.
[05:16:00 PM] => Arup : Will NAVs of income funds go down in future?
[05:18:06 PM] => RA : NAV�s of income funds reflect market conditions. Hence it is very possible that a day on day basis we could see NAV�s drop. However the long-term investor need not be overly concerned with day to day movements of NAV.
[05:18:19 PM] => AG 45 : Does Standard Chartered have any equity funds? Are you coming out with new schemes in near future?
[05:18:44 PM] => RA : Standard Chartered Mutual Fund does not have any equity schemes.
[05:20:05 PM] => S_Rao : Whats the maturity levels in Stanchart schemes?
[05:20:40 PM] => RA : GSSIF-IP is currently running an average maturity of 67 months.
[05:21:17 PM] => ayanad1 : Sir, how you see yield on 10-year govt. paper should be around in the short term? Do you see it staying below 8% for the month of January?
[05:22:36 PM] => RA : The interest rate environment in the current quarter is expected to stable with a bias towards lower interest rates.
[05:28:08 PM] => Myiris : Thats the end of the chat session for today.
[05:28:28 PM] => Myiris : Thank you all for your participation.
[05:29:37 PM] => Myiris : We thank Mr. Rajiv Anand for his time and his insights.
[05:30:29 PM] => Myiris : We look forward to your continued participation at the myiris chatmasala.
[05:31:04 PM] => Myiris : We look forward to seeing you all again shortly.
[05:31:22 PM] => Myiris : Till then bye from us.....
