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Time of India
3 days ago
- Business
- Time of India
What are low-duration mutual funds? Who should invest in them?
Low-duration funds invest in short-term debt instruments. These funds offer stable returns over six to twelve months. They suit investors seeking liquidity and lower interest rate sensitivity. These funds invest in CDs, CPs, treasury bills, and short-term corporate bonds. Investors can access such low-duration funds through various platforms online. Tired of too many ads? Remove Ads Where do these invest? Why consider these How to invest Points to note Tired of too many ads? Remove Ads (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of .) Low-duration funds are debt mutual funds that invest in debt and money market instruments with an average maturity of six to 12 months. They are suited to investors seeking relatively stable returns over a short-term horizon of six months to a year, offering a balanced mix of liquidity , returns, and lower sensitivity to interest rate funds primarily invest in a mix of short-term instruments, such as certificates of deposit (CDs), commercial papers (CPs), treasury bills, and short-term corporate bonds. The lower average maturity of the underlying securities helps reduce the impact of interest rate fluctuations, making these less volatile comparedd to long-duration debt funds are useful during uncertain interest rate environments. Since these invest in short-term instruments, the fund manager can adjust the portfolio more frequently based on changing market conditions. For risk-averse investors who want better returns than traditional savings or fixed deposits without locking in funds for long periods, low-duration funds offer an attractive middle can access low-duration funds through mutual fund platforms, banks, or financial advisors. It is advisable to review the fund's credit quality, expense ratio, historical performance, and experience of the fund management team. While these funds aim to preserve capital, credit risk cannot be completely eliminated. So investing in schemes with high-rated instruments is prudent.• Low-duration funds are best suited to short-term goals or as part of a larger asset allocation strategy.• Avoid using these funds for goals that demand complete capital protection in the short on this page is courtesy Centre for Investment Education and Learning (CIEL).Contributions by Girija Gadre, Arti Bhargava, and Labdhi Mehta.
Time of India
3 days ago
- Business
- Time of India
How much risk can you take when investing? Know the difference between your risk tolerance and risk capacity
Siddharth Mehta, a young lawyer and senior partner in a top law firm, has taken insurance and has started investing for his goals. Seeking a comprehensive plan, he has consulted a financial adviser. However, he's confused by a lengthy questionnaire assessing both his risk-taking capacity and risk tolerance— terms that sound identical to him. What should he do? Siddharth Mehta may be confused because both risk tolerance and risk-taking capacity relate to risk. However, in financial terms, they are not the same. Risk tolerance is a subjective measure. It reflects how much risk Mehta is willing to take and his comfort with potential losses and market volatility. Risk capacity , in contrast, is an objective evaluation of how much risk he can afford to take, based on his income, expenses and financial goals . Risk-taking capacity is Mehta's actual ability to take on financial risk. Since he is decades away from retirement, his risk capacity is higher than someone nearing retirement. Similarly, a high-net-worth individual has greater risk capacity than someone with limited resources. That's about how much risk he can afford to take, not just what he's comfortable with. This is assessed through questions like, 'Would a 20% market dip seriously hit your finances?' 'Do you have sufficient reserves to withstand it?' 'Do you have enough time to recover before needing the funds?' by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Eu usei estas meias japonesas e aliviei minha dor nas pernas NeuroFit Undo Risk tolerance is the emotional or psychological willingness to take risk, while risk capacity is the ability to take risk without jeopardising financial goals. Mehta may have the tolerance for risk but not the capacity—or vice versa. Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava, and Labdhi Mehta. Live Events
Time of India
19-05-2025
- Business
- Time of India
A higher CTC doesn't always equal higher take-home salary: Check CTC break-up to know actual take home
Suhaan Gupta and Aryan Chowdhury, both top engineering graduates, landed similar roles in the same industry. While Gupta got a Rs.36 lakh annual package, Chowdhury got Rs.24 lakh per annum. Naturally, Gupta expected a much higher take-home salary. However, a year later, he discovered that the difference between his and Chowdhury's salary was only Rs.1 lakh. He wants to know how this is possible despite a 25% gap in their pay packages? At the time of placement, the salary package of Suhaan Gupta must have been quoted as cost to company (CTC). As the name suggests, CTC reflects the total amount a company spends on an employee, not just the cash component of the salary. It includes benefits like the employer's contribution to the EPF , insurance premiums, and other perks. This often inflates the package on paper, creating a mismatch between the quoted figure and the actual in-hand salary. In Gupta's case, his Rs.36 lakh CTC possibly included non-cash components, such as the employer's share of the EPF, life and health insurance premiums, interest subsidies on loans, food coupons and transport allowance. Additionally, a one-time payment, like the joining bonus and performance-linked variable pay, may have been factored in. The variable pay depends on job performance and may vary each year. As a result, despite a higher CTC, Gupta's take-home salary isn't significantly more than that of Aryan Chowdhury. Most large companies follow the CTC model, but the extent and structure of components vary. Hence, prospective employees should closely examine the composition of the CTC before making a decision. As seen in Gupta's case, a higher CTC doesn't always translate to a higher take-home salary. Rather than focusing solely on the total CTC, it's wiser to evaluate its components and consider the benefits that are truly valuable. Content courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta. Live Events
Time of India
19-05-2025
- Business
- Time of India
What is the digital rupee?
Let's understand what is the digital rupee : 1. The digital rupee is India's central bank digital currency , issued by the RBI . 2. It is a tokenised digital version of the Indian rupee , designed to complement physical cash and existing digital payment systems. 3. Banks provide the digital rupee app, where one can convert INR from linked bank accounts to digital rupees and start transacting using scan codes. 4. It uses distributed ledger technology to ensure security and transparency. Live Events 5. Unlike bank deposits, holding digital rupees does not generate any interest. Content courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
Time of India
12-05-2025
- Business
- Time of India
5 things you need to know about debt trap
1.A debt trap occurs when one struggles to repay borrowed funds, leading to a cycle of taking on more loans to cover previous debts. use of credit cards, high-interest loans , unplanned spending, and job loss are major contributors to debt traps. #Operation Sindoor India responds to Pak's ceasefire violation; All that happened India-Pakistan ceasefire reactions: Who said what Punjab's hopes for normalcy dimmed by fresh violations traps can lead to financial stress , reduced credit scores, and difficulty in securing future loans. can avoid getting into a debt trap by paying off loans, starting with high-interest debts. Still confused between New vs Old Tax Regime? Find out which one saves you more with our tax calculator! consolidation, or combining multiple loans into one with a lower interest rate, can help manage repayments more effectively. Content courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
