SEBI With Sebi reducing the face value of debt securities from Rs 1 lakh to Rs 10,000, bonds have also become an attractive investment tool for retail investors. This move by SEBI has made it easier for retail investors to access bonds. Also, this will increase the participation of non-institutional investors in the corporate bond market. At a time when there is talk of interest rate reversal, retail investors should look at investing in bonds along with equities.
More bonds will be issued
With this step of SEBI, common retail investors will buy bonds. This will result in more bond issues. This will lead to more trading activity in the secondary markets in the coming years. This decision will encourage regular investors to buy bonds. Due to reduction in face value, the debenture price of the individual will also come down. This will facilitate retail investors to explore it. In such a situation, the liquidity of the bond market will also improve.
Fixed income investment is necessary
Wealth managers say that asset allocation is very important for long term wealth creation. Therefore fixed income investments should be a part of an investor’s portfolio. According to experts, this is the right time to invest in the bond market. Because they are offering higher returns than FD. At the same time, there is much less risk here compared to shares. Bonds are an important part of a balanced portfolio. According to experts, 20 percent exposure in long term portfolio should be in bonds.
This is the right time to invest in bonds
Interest rates are currently near high levels. These are expected to go down in the coming years. Therefore, investing in bonds at this time has the potential to not only give interest income but can also give capital gains in the next 12 to 18 months.
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