Dubai Debt Crisis

Dubai World, a state run subsidiary investment company asked its creditors if it can delay its payments by 6 months. Dubai World is a major investment company in the region which has undertaken a lot of development projects. It has exposure to $59bn debt. It revealed that it was not in a position to honor $3.5bn payment commitments due in December this year.

Most of the markets across the globe plunged on account of potential default of the company. There are concerns that it could be a blow to the world’s recession recovering markets. Most of the countries have exposure to Dubai and worried about undisclosed debts.

November 27, 2009 | Filed Under Market Outlook | Leave a Comment

What are Balanced Funds

Balanced funds are a blend of both Growth and Income funds. They offer growth of capital besides give some current income. The portion of investments in equity and bonds are mentioned in the offer document.

These are suitable for investors who would like to see the combination of growth and moderate income with a little less risk.

November 9, 2009 | Filed Under Mutual Funds | Leave a Comment

What is an Income Fund

The primary objective of Income Funds is constant current income and preservation of capital rather than capital growth. They mainly invest in debt securities like Government bonds, Bonds of high rated companies, Mortgages backed by governments etc. Debt securities earn consistent income through interest payments which is passed on to the investors.

Income funds are suitable for the investors who want to maximize current income and willing to take some degree of risk. Income funds are not yet matured in India while they are very common in Europe and the U.S.

November 9, 2009 | Filed Under Mutual Funds | Leave a Comment

Growth Funds

Primary objective of growth funds is capital appreciation. They invest in a portfolio of equity securities which have long term growth potential. Hence the current income would be low for growth funds. The aim of growth funds is to earn above average returns for their investors. The companies in the portfolio of a growth fund are usually in growing /expansion stage and are expected to distribute no dividends.

Since there is always an uncertainty involved in long-term growth they are considered to be more risk-prone. The time horizon for investment is considerably high compared to other funds. Read more

November 9, 2009 | Filed Under Mutual Funds | Leave a Comment

Commodity Funds

Commodity funds invest in different commodities directly or through shares of commodity companies or through commodity futures. These funds can invest in a particular commodity like gold, silver, oil, pulses etc. or have a diversified portfolio of commodities.

A true commodity fund is one which invests directly in commodities. Most of the investors actually don’t want to buy the commodities but trade and get benefited from commodity price fluctuations. Commodity futures are better suited for this. Read more

November 8, 2009 | Filed Under Mutual Funds | Leave a Comment

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