[04:25:47 PM] => Welcome to the LIVE chat with Mr Rajiv Anand , Fund Manager - Fixed Income, Standard Chartered AMC. Mr Anand will be joining us shortly.
[04:39:28 PM] => Disclaimer
[04:40:16 PM] => Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme (to generate stable returns with a low risk strategy by investing in good quality fixed income securities) will be achieved. The NAV of the Scheme can go up or down depending on factors and forces affecting Securities Market including fluctuation in interest rates, trading volumes and reinvestment risk. Past performance of the Sponsor/AMC/Mutual Fund is not necessarily indicative of the future performance of the Scheme. Grindlays Super Saver Income Fund (GSSIF) is the name of the Scheme and does not in any manner indicate either the quality of the Scheme, its future prospects or returns. The Sponsor or any of its associates is not responsible or liable for any loss resulting from the operation of the Scheme beyond the corpus of the Trust of Rs. 20,000/. Please read the Offer Document carefully before investing.
[04:40:57 PM] => Statutory Details: Standard Chartered Mutual Fund has been set up as a trust by Standard Chartered Bank (liability restricted to corpus of Trust of Rs. 20,000) with Standard Chartered Trustee Company Private Limited (Company with limited liability) as the Trustee and Standard Chartered Asset Management Company Private Limited (Company with limited liability) as the Investment Manager.
[04:42:54 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.
[04:46:16 PM] => Welcome To the Live Chat Session - Mr Rajiv Anand
[04:46:35 PM] => Aditya67: How does the operation of a debt fund differ from that of an equity fund?
[04:47:09 PM] => RA: A debt invests only in fixed income securities like government bonds and debentures of highly rated corporate.
[04:47:43 PM] => Vikram77: Are income funds only for the risk averse investor?
[04:48:30 PM] => RA: In the short term interest rates tend to be volatile. Hence there could be opportunities for the short term investor as well who could look to maximise his returns.
[04:49:13 PM] => Rohita: Why should one invest in mutual funds at all? Equity funds have performed dismally anyway but so have the income funds. Also, do you believe there will be a negative impact on UTI decision to pay only 5% dividend!! UTI has also the cheek to underpay its investors while hiking salaries of its employees by 60%.
[04:50:01 PM] => RA: Equity funds are at the mercy of the underlying market ie the equity market. On the other hand debt funds invest only in debt instruments. For e.g. over the last 1 year equity market have been dismal, debt funds like ours have returned over 11.50% absolute.
[04:51:43 PM] => Chandu: Is it better for an investor to invest in bonds directly (where he will get at least 9% return) or in MFs(where no income is assured).?
[04:52:34 PM] => RA: If the investor stays with a debt fund for a reasonably long period the returns although not assured are attractive. However the big benefit comes from the tax benefits that debt funds have as compared to direct investment in bonds. Liquidity is the other aspect that makes debt funds more attractive as compared to bonds.
[04:53:23 PM] => Rameshnaik: What is the difference between the 3 incomes schemes that you manage? They all look the same to me.
[04:54:02 PM] => RA: We have 3 plans: GSSIF –investment plan which is built for the long term investor, GSSIF ST is built for the short term investor and Grindlays fixed savings scheme is a tax efficient close ended debt fund which compares with a fixed deposit.
[04:54:46 PM] => Riteshrajan: How do you do your valuation? Is it true valuation of debt funds leaves a lot of room for manipulations?
[04:55:24 PM] => RA: Our government bond book is valued at daily traded prices while our untraded book is revalued as per sebi guidelines. After the sebi guidelines have been issued I do not think there is room for manipulation.
[04:55:49 PM] => Rohit: Do Bankers make better Fixed Income Fund managers than other Mutual Funds
[04:56:46 PM] => RA: Our experience has shown that bankers make the best debt fund managers because of his core expertise in managing interest and liquidity risk. I think we are a good example!
[04:57:27 PM] => Pranav: What do debt fund managers (in case of MF's) believe in- Current Yield or YTM? Why?
[04:57:51 PM] => RA: The value in a bond is based on the present value of future cash flows hence YTM is the best indicator.
[04:58:22 PM] => Ymata: Scam after Scam after scam - all related to banks. How transparent is Fixed Income Trading ? Do you feel the need for an entry of a greater number of players to increase its depth?
[04:59:28 PM] => RA: The fixed income market is a Delivery vs payment market. Hence there is very little settlement risk. We also have very strong risk controls to mitigate any settlement or systemic risk.
[05:00:58 PM] => Hari: Why does exchange fluctuation have a bearing on Gilt Mutual Funds ? I lost a lot of money during June 2000 - Aug 2000 by putting in my money in RISK FREE GILT MUTUAL FUNDS?
[05:01:35 PM] => RA: One of key factors RBI is worried about is the value of the rupee. At times of extreme volatility in the rupee rbi will announce measures to squeeze liquidity in the system and hence stabilise the rupee. This is what happened on July 21st last year. As liquidity is squeezed bond prices drop and hence debt and gilt fund NAV’s.
[05:02:38 PM] => Hussain: Is there a correlation between the American / European and Indian Economies. Why is that everyone is expecting further rate cut in India given Bank of England's decision to cut rates and Greenspan's expected cut. ? Can the Indian Economy actually justify a lower interest rate regime ??
[05:03:12 PM] => RA: We are now part of the global economy. Hence movement of global interest rates will impact to a certain degree our interest rates as well.
[05:06:59 PM] => Ssharma :Your view on interest rates where do you think that it will stabilise
[05:07:17 PM] => RA: We manage money based on a sophisticated interest rate forecasting model. Currently the process is neutral in the medium term meaning we see interest rates flat to lower in the medium term.
[05:08:38 PM] => Kartikeyan : Is the Govt. Stupid or what - FD's are taxable ,so are all other Fixed Income Coupon bearing instruments while income from MF\'s (read dividend) is tax free at the hands of the investor which is atleast 300 basis points higher on pre tax levels. Should not there be a level playing field or is the MF Industry crying for protection.
[05:09:33 PM] => RA: No Comments
[05:11:09 PM] => Rajni :Debt has arisen from the dead - its become a preferred option for all investors. - Who should you thank - Harshad , KP, RBI , FM, Tehelka or The Fixed Income Fund Manager who has shown consistent performance
[05:11:34 PM] => RA: The fixed income fund manager of course!!
[05:12:03 PM] => Dhiren :Banks and MF\'s have been flush with funds over the last couple of years and yet we haven't seen lower interest rates . Can we expect lower rates now?
[05:12:45 PM] => RA: Over the last 2 years despite short term volatility interest rates on the long bonds have come down by over 2 percentage points. This is a big move in any market
[05:13:37 PM] => Bond_vvv: How to save money?
[05:13:48 PM] => RA: Invest in Grindlays Super saver income fund.
[05:14:28 PM] => Sheetalkn :your fund has performed well since inception, with the expected interest cut how would u place your fund ?
[05:15:18 PM] => RA: My fund is well positioned to benefit from any interest rate cuts. However we will be nimble in the market to mitigate the hit if the anticipated rate cut is not forthcoming.
[05:15:59 PM] => Bsawant :In view of a declining interest rate scenario, is it better to invest in fixed
[05:16:49 PM] => Income funds give you the benefit of diversification and liquidity which a bond usually does not provide.
[05:17:47 PM] => Sanjay20shr :Could you tell me who should go for Gilt funds. Please answer your questions keeping the investment horizon of the person.
[05:18:15 PM] => RA: Gilt funds tend to be volatile in the short term but is suitable for investors with a holding period of over 1 year.
[05:19:54 PM] => Myiris : Hang on, Rajiv is on a Call :D
[05:23:13 PM] => Goyal_vimal: in spite of unique strategy being followed by Standard Chartered Mutual Fund, your scheme, is not doing well. Why this is so. In fact in last few months all the schemes have very good returns b\'use of rising bond prices due to several reasons. why you an exception?
[05:23:37 PM] => RA:Your numbers I believe are incorrect. We are among the top three performing debt funds on a consistent basis since inception.
[05:24:25 PM] => Sanjay20shr :Is it fair to say hat a risk averse person with a investment horizon of 10 yrs can look towards these funds? What clue can I draw from the average maturity's profile of securities in gilt edged mutual funds.
[05:25:01 PM] => RA:There are various types of debt funds, long term funds for the investor over 1 year short term funds ideal for an investor who would typically invest in 90 day FD’s, liquid plans for investors who keep money in savings accounts. Pick the right fund and you could optimise your returns.
[05:25:48 PM] => Milinddavane :How would you compare your income fund to the income funds of other mutual funds.
[05:26:46 PM] => RA:We are among the top three performing debt funds on a consistent basis since inception. We are among the fastest growing mutual funds in the country having reached Rs 1000 crores in 10 months since inception. Most important we are a debt fund focussed only on debt with a unique interest rate forecasting model.
[05:30:13 PM] => Rohit: If you believe in YTM then how do you trade . Isn't carry an important factor for
[05:30:50 PM] => the Fund Manager
[05:31:21 PM] => RA: A large portion of our income comes from mark to market.
[05:32:01 PM] => Weenayak what will be the likely impact of the carry forward ban on the yields in the govt.securities ?
[05:32:25 PM] => RA: If there is large scale selling by FII’s because of the ban in carry forward leading to a reduction in liquidity there could be pressure on the rupee which could push interest rates up. However this I believe is unlikely as the ban in carry forward may be bad in the short run but healthy in the long run.
[05:33:04 PM] => Goyal_vimal :DO you mark to market your debt assets while calculating scheme NAV.
[05:33:45 PM] => Goyal_vimal : Do you mark to market your debt assets while calculating scheme NAV.
[05:33:58 PM] => RA: Yes.
[05:35:45 PM] => Shalini: With badla being banned - its official now , do you see more cash flow into Debt Funds?
[05:36:04 PM] => RA: We are already seeing this move more so because of the collapse of the unofficial badla market.
[05:37:01 PM] => Janice: With what time horizons/view do you put your money in Gilts / Corporate Bonds.
[05:37:26 PM] => RA: We relook at our portfolio on a continuous day to day basis. However we do trade the portfolio in an aggressive manner.
[05:37:55 PM] => Vsabhlok: In the view of lowering of interest rates should one invest in GILT or DEBT Funds?
[05:38:21 PM] => RA: Debt funds are better because the short term volatility is lower and there is the added benefit of movement of credit spreads.
[05:38:52 PM] => Mehrapriyanka76 : How is my retired grandfather going to survive if interest rates keep on coming down?
[05:39:27 PM] => RA: Invest in short term debt funds like Grindlays Super Saver Income fund Short term. It will give your grandfather attractive tax free returns and is a safe option.
[05:42:28 PM] => Myiris.com : Sorry Friends, Hang on, Rajiv is on a important Call
[05:47:39 PM] => Vijay Sabhlok: Where on which website can your fundinfo be accessed
[05:47:53 PM] => RA: Myiris.com has details of our funds. Try the mutual fund channel.
[05:48:59 PM] => Sanjay: Sir, it is not clear at all from your reply- which debt funds (both in long term view and short-term view) should I go for. My second question was If I have 10 yrs horizon &risk averse profile- should I invest in gilt funds considering the safety element.
[05:49:18 PM] => RA: If your investment horizon is less than a year a debt fund is better. In the long term if you want to eliminate credit risk you could look at a gilt fund.
[05:49:51 PM] => Narayan: Do you believe whether Oil will play havoc with our Deficit this year to. Do you expect the govt. to meet its Fiscal / Revenue Targets
[05:50:52 PM] => RA: With our huge oil bill global prices of oil will always be a problem. Currently there does not seem to be much pressure but one has to keep a close watch on it. Last years’ experience has inspired confidence on the government’s ability to meet targets.
[06:02:57 PM] => T.K.SRINIVASAN :What kind of return one could expect from the debt market in one year under : a)optimistic conditions: b)pessimistic conditions c)normal conditions
[06:03:28 PM] => RA : a)optimistic conditions: 10-12% pa, b)pessimistic conditions: 8-10% pa, c)normal conditions; 9-11% pa
[06:04:03 PM] => Haresh :Is PPF a better bet than any Debt Fund (EVEN THE GRINDLAYS SUPER SAVER) your comments
[06:04:52 PM] => RA: PPF with the added tax benefits is always a good investment. However you can invest only Rs 60,000 a year and there is no liquidity available.
[06:05:49 PM] => Vipul :What are the Yields currently for a 5, 10 and 20 year paper in the Markets. Is the
[06:06:39 PM] => RA: The 5, 10 & 20 year yields are approx. 9.21%,10.01% and 10.60% resp. No the curve is not inverted at the long end.
[06:07:12 PM] => Sanjay20shr :What is your view on interest rate scenario 5 years from now?
[06:07:43 PM] => RA: It is difficult to make calls 5 months from today, 5 years is too far away to have any meaningful view. It is basically a shot in the dark.
[06:21:06 PM] => Aagarwal:From 250 crores plus you have touched 800 odd crores . Do you believe that you can maintain the same pace of RETURNS (which were good no doubt ) when you were a smaller fund
[06:22:03 PM] => RA: Despite the scorching pace at which we have been growing our returns have suffered. Hence I see no reason why our investment performance will continue to remain in the upper quartile.
[06:22:48 PM] => Vijay sabhlok: What % of returns in the growth option would u expect your fund to achieve?
[06:23:02 PM] => RA: Over the next 1 year about 9-11% pa.
[06:23:58 PM] => Rajesh : Given that we are not fully convertible on the currency front would you still say that our interest rates are not controlled in any manner or dictated to by the RBI
[06:24:35 PM] => RA: RBI does keep a close watch on both the currency as well as interest rates. It will move on either depending on market conditions. These actions would be very similar to what any central bank in the world would do.
[06:25:59 PM] => Myiris : Rajiv will take the last 3 questions for the day.
[06:30:37 PM] => Janak : Did we actually need another CRR cut . Are CRR cuts and lowering of Bank rates anyway linked to lower interest rates or is it just a question of sentiment / reference point ?
[06:30:57 PM] => RA: The CRR cut infuses Rs 4500 crores of liquidity into the market. This will in the short term bring down call rates and boost sentiment in the bond market. It will also help the government meet its borrowing program. Whether it was required now or later is always debatable.
[06:31:30 PM] => Nikhil : What is your view on the exchange rate. Do you believe that our currency is undervalued ?
[06:31:57 PM] => RA: I believe we will see a depreciation of the rupee to about 47.50 to start with in phased manner. The REER studies indicate we are overvalued.
[06:32:24 PM] => Nshankar : Debt Funds are flushed with money so are the banks and at the same time there are no projects. So Mr. Anand my question is on deployment. Where are you putting in your Money - G-secs ?? Is the quality of Government paper actually worth it ??
[06:33:07 PM] => RA: Government bonds are the best risk we have in the country. The likelihood of the central government defaulting on its loans is extremely low. Apart from everything else the government can monetise to repay old loans.
[06:34:36 PM] => RA : Thank you for your participation and am looking forward to chatting with you in future
[06:35:25 PM] => Myiris: Thank you very much Mr Rajiv Anand for a very informative session.
[06:36:54 PM] => Myiris: Thank you all participants and join us on Friday for live Chat with Mr Sunil Singhania - Director- Advani Share Brokers Pvt Ltd
[06:37:12 PM] => Bye for now