🥇 Gold bonds outshine, Massive fuel price hike & XIRR in MF
Orowealth Weekend Reads: May 3, 2020
LAST WEEK MARKET MOVES
|Sensex||Nifty||Nifty Midcap 100||Nifty Smallcap 100|
|31,642.70 (-6.15%)||9,251.50 (-6.17%)||12,788.95 (-5.28%)||4,910.60 (-4.10%)|
Earn up to 12.00% returns!
Introducing Invoice Discounting
Orowealth provides a unique opportunity of discounting invoices raised on big players in the consumer space. The vendors have to wait for 30-90 days to receive the money from the companies, so you can provide liquidity to vendors and earn an attractive yield.
Invest with a minimum ticket size of INR 50K, and earn an annualized return of upto 12.00% on Invoice discounting deals.
For example, when you make an investment of 50 thousand at 12.00% p. a, you will get back 51.43 thousand (approx) after 91 days.
Why should you invest?
Orowealth has tied up with some exclusive liquidity providers on the TradeCred platform to provide a timely exit for Oro-labelled transactions on due dates*.
This opportunity is exclusive for Orowealth investors.
* Orowealth deals are fully liquid with the settlement cycle of T+5 days.
* For Non-Orowealth deals, liquidation is purely based on the bidding system. For any premature redemption, liquidity cost may be deducted from interest earned on the investments.
NEWS WE HAVE BEEN FOLLOWING
While investors in most instruments have seen their invested capital decline, holders of sovereign gold bonds (SGBs) have had a field day. With the yellow metal outshining other asset classes, these bonds have delivered stellar returns to their investors. For e.g., those who invested in the first series launched in November 2015 (SGB-2015-Series-I) have seen the instrument return 84% as of April 27. Even the SGB 2019-20-Series-I, which has not yet completed a year since launch, has risen 48%. It is not just other instruments that the SGBs have outperformed, they have bettered returns seen by other gold-related instruments like gold ETFs and e-gold. For comparison, let’s consider the SGB-2016-Series-I which was launched on February 8, 2016, and gold ETFs. While the SGB has returned 89% (including coupon payments), the ETFs (the average of the top three funds by volume) have returned 61% in the same period. At the same time, gold prices in rupee terms have risen 62%. The reason that SGBs have done well compared to other gold-related products is because they pay a fixed interest on the holding (2.5-2.75% per year). Investors can also get a discount of Rs 50 if they invest in them online. Further, capital gains are tax-exempt if held till maturity.
The RBI has sold SGBs in 38 tranches so far. Investors can buy them online via brokers or on the secondary market.
The central government hiked the excise duty on petrol by a record Rs 10 per liter and on diesel by Rs 13 per liter on May 5. But this increase will not impact consumers as retail prices will not be raised. Oil marketing companies like Indian Oil, BPCL, and HPCL will absorb this hike. According to a PTI report, this increase will help the government garner Rs 1.6 lakh crore. These public sector companies will set this hike against the massive decline in crude oil prices. Even though crude prices have tanked in global markets, oil companies have not passed on the benefit to consumers. The base price of petrol is about 40% of its retail price with government taxes, duties, and transportation costs making up the rest. This year, because of the coronavirus pandemic, the government’s revenues have declined while its spending has increased tremendously. By raising the excise duty, the government will be able to make up for some of its revenue loss.
This is not the first excise duty increase by the government. It had raised excise duty on petrol and diesel by Rs 3 per liter in March.
FROM OUR BLOG SECTION
Investors often have confusions over how to calculate their “real” returns, considering all the variations and amount redemptions etc. from their invested amount. However, is the answer always in terms of CAGR and simple IRR? Not at all!
One of the most crucial but often neglected areas is personal finance. It can be a little overwhelming to manage your personal finances if you do not have a finance background. To make your life a little easier, we have simplified some common financial terms for you.
QUOTE OF THE WEEK
“It is better to fail in originality than to succeed in imitation.”
– Herman Melville (an American novelist, short-story writer)
Chosen by Esther – Orowealth.