Long-term funds – Brl Speak http://brlspeak.net/ Mon, 03 Jan 2022 20:24:55 +0000 en-US hourly 1 https://wordpress.org/?v=5.8.2 https://brlspeak.net/wp-content/uploads/2021/11/brl-160x160.png Long-term funds – Brl Speak http://brlspeak.net/ 32 32 Net long-term fundraising reaches a record € 677bn https://brlspeak.net/net-long-term-fundraising-reaches-a-record-e-677bn/ Wed, 15 Dec 2021 17:02:58 +0000 https://brlspeak.net/net-long-term-fundraising-reaches-a-record-e-677bn/ According to the report, global long-term funds recorded net inflows of € 677bn, up € 4bn compared to € 673bn in inflows in Q2 2021. The United States recorded the highest net inflows (€ 208bn), followed by Europe (€ 206bn) and the Asia-Pacific region (€ 160bn). Bond funds attracted the largest net sales (€ 287bn), […]]]>

According to the report, global long-term funds recorded net inflows of € 677bn, up € 4bn compared to € 673bn in inflows in Q2 2021.

The United States recorded the highest net inflows (€ 208bn), followed by Europe (€ 206bn) and the Asia-Pacific region (€ 160bn).

Bond funds attracted the largest net sales (€ 287bn), with strong demand in the United States (€ 130bn), followed by Europe (€ 67bn) and China (€ 53bn) .

Net sales of equity funds also remained strong, with total sales reaching 195 billion euros), the United States (72 billion euros), Europe (57 billion euros) and Japan (26 billion euros) with the highest net sales.

Multi-asset funds recorded € 163 billion in total net inflows, up from € 119 billion in the second quarter of 2021, with Europe accounting for the majority of global net sales (€ 75 billion), followed by China (32 billion euros) and Canada (20 billion euros).

At the same time, net sales of money market funds (MMFs) continued to decline. According to the report, money market funds recorded net inflows of 18 billion euros, compared to 14 billion euros in the second quarter of 2021.

The United States saw its net sales of MMFs drop to € 7 billion from € 32 billion in the second quarter of 2021. In addition, China, which has traditionally been a strong market for MMFs, also recorded relatively low net inflows (12 billion euros).

Bernard Delbecque, Senior Director of Economics and Research said: “Global net sales of equity, bond and multi-asset investment funds remained solid in the third quarter of 2021, against a backdrop of continued investor confidence despite greater volatility in the stock markets.

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Parliament panel calls on NHAI to explore debt restructuring and raise long-term funds https://brlspeak.net/parliament-panel-calls-on-nhai-to-explore-debt-restructuring-and-raise-long-term-funds/ Tue, 09 Mar 2021 08:00:00 +0000 https://brlspeak.net/parliament-panel-calls-on-nhai-to-explore-debt-restructuring-and-raise-long-term-funds/ Expressing dissatisfaction with the massive debt servicing the debt of 97,115 crore rupees of the National Highways Authority of India (NHAI), a parliamentary criminal asked the authority to explore existing debt restructuring and look for options for long-term fundraising. The ministry-linked Standing Parliamentary Committee on Transport, Tourism and Culture, in its report tabled in Parliament […]]]>
Expressing dissatisfaction with the massive debt servicing the debt of 97,115 crore rupees of the National Highways Authority of India (NHAI), a parliamentary criminal asked the authority to explore existing debt restructuring and look for options for long-term fundraising.

The ministry-linked Standing Parliamentary Committee on Transport, Tourism and Culture, in its report tabled in Parliament on Tuesday, also called on NHAI to prioritize its delayed road projects.

“The committee is saddened to see the enormous responsibility for servicing the debt of NHAI in the years to come,” said the 31-member panel chaired by TG Venkatesh, highlighting the liability for servicing the debt of Rs 38,997 crore. for 2021-22, Rs 28,800 crore for 2022-23 and Rs 29,318 crore for 2023-24.

The committee notes that the NHAI’s debt service liability for the next three years is even higher than the estimates that the ministry provided to the committee during its review of the ministry’s grant applications (2020-2021). he declared.

“The Committee recommends that NHAI may prioritize the completion of its delayed road projects to avoid further escalation of costs in such projects. The Committee further recommends that NHAI explore the restructuring of its existing debt and prepare proposals for raising long-term funds in the financial institution announced in the budget speech (2021-22), “the report said.

The Minister of Finance, Nirmala Sitharaman, during the presentation of the budget on February 1, 2021, announced that a sum of Rs 20,000 crore had been provisioned in the budget to capitalize a development financial institution (DFI).

“The ambition is to have a loan portfolio of at least Rs 5 lakh crore for this DFI in three years,” she said, adding that a bill would be presented to set up the DFI which will act as a supplier, catalyst and catalyst. for the financing of infrastructure.

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With high interest rates likely, investors should avoid long term funds https://brlspeak.net/with-high-interest-rates-likely-investors-should-avoid-long-term-funds/ Wed, 24 Feb 2021 08:00:00 +0000 https://brlspeak.net/with-high-interest-rates-likely-investors-should-avoid-long-term-funds/ The yield on 10-year government bonds fell to around 6.2%. With interest rates set to rise this year, investors need to recalibrate their fixed income strategy. What caused the spike? In the Union budget, the government announced that it would borrow another crore of Rs 80,000 during the current financial year, which surprised the markets. […]]]>

The yield on 10-year government bonds fell to around 6.2%. With interest rates set to rise this year, investors need to recalibrate their fixed income strategy. What caused the spike? In the Union budget, the government announced that it would borrow another crore of Rs 80,000 during the current financial year, which surprised the markets.

The government plans to borrow 12.6 trillion rupees in 2021-2022 (FY22). At 6.8% of gross domestic product, the fiscal deficit for fiscal year 22 is higher than expected. The government has set a budget deficit target of 4.5% for 2025-2026 …

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First published: Wed 24 February 2021 6:10 IST

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Attracting long-term funds: Global investment stars aligned with India https://brlspeak.net/attracting-long-term-funds-global-investment-stars-aligned-with-india/ Wed, 19 Aug 2020 07:00:00 +0000 https://brlspeak.net/attracting-long-term-funds-global-investment-stars-aligned-with-india/ India has announced a new opening of sectors such as insurance and defense as part of its economic stimulus plan. When it comes to fiscal stimulus, the pandemic-stricken world looks like a déjà vu (by a huge multiple) of the 2008 financial market implosion when it comes to cheap money raining down from the treasury […]]]>
India has announced a new opening of sectors such as insurance and defense as part of its economic stimulus plan.

When it comes to fiscal stimulus, the pandemic-stricken world looks like a déjà vu (by a huge multiple) of the 2008 financial market implosion when it comes to cheap money raining down from the treasury coffers. from the wealthy governments of the United States, the United Kingdom, Europe and Japan. While most of these measures are aimed at immediately reviving commercial activities in the respective markets, the reality of the financial markets dictates that a certain proportion of this excess liquidity would be deployed in investment avenues outside the national markets. It seems fair to assume that apart from an overhaul of supply chain dependencies by multinational manufacturing companies, global institutional and alternative investment funds would also consider diversifying their investments.

India has announced a new opening of sectors such as insurance and defense as part of its economic stimulus plan. In Budget 2019, a decision to grant a long-term capital gains tax (LTCG) exemption to sovereign wealth funds (SWFs) for investments in specific infrastructure projects over the next three years marked the determination of India to attract long-term and patient, institutional, global investment capital. India now has a unique opportunity to dramatically increase the flow of global long-term capital by extending the LTCG tax exemption to investments of all regulated global alternative investment funds (PE / VCs) in desired sectors – a LTCG potential tax does not arise in the future until the exit of an investment in India by a long-term investor. However, when making an investment, there is no question of taxation. Therefore, there is no immediate loss of tax revenue for the public treasury. It should be noted that alternative investment funds are a major source of global capital ($ 1.5 trillion invested by PEs in 2019), with India’s share exceeding $ 40 billion (EY research for India PE Trend Book 2020). Extending the LTCG tax exemption to these giant global investment institutions, with a relatively patient and long-term investment philosophy, would result in a significant increase in investments without the current tax burden.

Another area is to attract India focused fund managers as well as global funds with a large allocation in India to locate in India. The AUM of REITs in India is close to $ 400 billion (according to the NSDL-FPI Monitor) and that of India-focused REITs alone is estimated at $ 40 billion (EY research). Traditionally, even 100% India focused fund management companies have generally preferred to be located in jurisdictions like Mauritius and Singapore. The fear of subjecting the foreign fund to more unfavorable / uncertain Indian taxation due to the fund management company being located in India and being exposed to the risk of reputed commercial presence / residence in India is one of the reasons. During the former Narendra Modi regime, efforts were made to introduce a mechanism to provide tax security against such a tax impact even if the fund management company were to be located in India. However, due to a long list of requirements, many of which are virtually untenable, there have only been a handful of proposals to locate fund management operations in India. There is an urgent need to make desirable changes, such as dismantling most of these debilitating conditions (for example, a maximum cap of 26% of participation in Indian companies and proof that there is no indirect ownership. , even minority, by Indian residents in the fund abroad). Most of these conditions are not the norm in global fund management jurisdictions like Mauritius and Singapore, which effectively compete with India for such operations. Removing these irritants will not have any negative impact on Indian government revenue.

To conclude, the stars of the global investment industry are aligned with India. By making smart changes to the existing LTCG tax exemption provisions for global investment funds and providing greater clarity and certainty regarding the taxation of those funds investing in Indian companies whose fund management is carried out in India, it is possible to attract a much higher level of long-term global investment flows with minimum cost to the Treasury.

The author is the national tax leader, EY India. Views are personal

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Sale of COVID-19 records record outflows in long-term funds https://brlspeak.net/sale-of-covid-19-records-record-outflows-in-long-term-funds/ Thu, 16 Apr 2020 07:00:00 +0000 https://brlspeak.net/sale-of-covid-19-records-record-outflows-in-long-term-funds/ (Photo: Shutterstock) March saw record $ 326 billion outflows from long-term mutual funds and exchange-traded funds as the COVID-19 pandemic spurred the fastest equity bear market in history of the stock market, according to Morningstar data. By comparison, the largest peak in monthly outflows during the 2008 financial crisis was $ 104 billion. Related: COVID-19 […]]]>
(Photo: Shutterstock)

March saw record $ 326 billion outflows from long-term mutual funds and exchange-traded funds as the COVID-19 pandemic spurred the fastest equity bear market in history of the stock market, according to Morningstar data.

By comparison, the largest peak in monthly outflows during the 2008 financial crisis was $ 104 billion.

Related: COVID-19 Forcing Retired TDF Investors To Draw Savings

While total fund flows were significantly negative, long-term U.S. equity funds posted net inflows of $ 10.5 billion in March. Almost all of it was parked in passively managed funds, which attracted $ 41 billion. Actively managed funds continued their strong outflows – in March they lost $ 31 billion. Active funds experienced cash outflows for the 109th month of the last 120.

The only other commodities to post positive flows in March were commodities funds, at $ 3.8 billion. Taxable bonds suffered $ 240 billion in cash outflows in March.

The flows to US equity funds and commodities funds came as stock markets plummeted and demand for energy effectively halted, leaving the floor inundated with oil supplies.

“We don’t have a lot of visibility into what explains the flows to US equity funds and commodities,” said Tony Thomas, senior analyst at Morningstar. “Some of the demand may come from rebalancing – stocks have fallen so sharply that some funds may have had to rebalance into stocks. Obviously there may have been some bottom fishing as well. “

Passive funds have drawn liquidity, while some market watchers predict the impact of COVID-19 on the economy – retailers have been mostly decimated while Amazon shares have hit record highs – will make active management in vogue.

“People can look to broad market exposure for the rebound instead of trying to pick winners and losers,” Thomas said.

The bleeding of taxable bond funds could be a bad sign for corporate balance sheets, as about 20% of the entire fixed income market is made up of corporate debt.

“I cannot speculate on the direct impact of these flows on the balance sheets of companies. Still, one could argue that taxable bond cash outflows suggest that investors are questioning the ability of companies to pay their debts in the event of a sharp and prolonged economic shutdown, ”Thomas said.

“And if there is a drop in demand for corporate debt, companies may have to offer higher yields to attract investors,” he added.

The top 10 active fund managers all posted cash outflows in March, with PIMCO, Vanguard and Fidelity losing the most, at $ 26.5 billion, $ 25.9 billion and $ 24.3 billion, respectively .

All but two of the top 10 managers experienced cash outflows from passive funds. State Street Global Advisors’ SPDR S&P 500 ETF attracted $ 23.9 billion. T. Rowe Price’s passive funds attracted $ 2.4 billion.

READ MORE:

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Income into retirement planning to secure long-term funds https://brlspeak.net/income-into-retirement-planning-to-secure-long-term-funds/ Thu, 18 Jul 2019 07:00:00 +0000 https://brlspeak.net/income-into-retirement-planning-to-secure-long-term-funds/ Take a look at how much money you need to stay readily available. When it comes to thinking about income in retirement, many people terribly underestimate the level of financial resources they will need to live comfortably in retirement. Thanks to modern medicine and better health care, we are living on average much longer than […]]]>

Take a look at how much money you need to stay readily available.

When it comes to thinking about income in retirement, many people terribly underestimate the level of financial resources they will need to live comfortably in retirement. Thanks to modern medicine and better health care, we are living on average much longer than previous generations, but our expected target retirement ages have not adjusted accordingly. People don’t like to think about their mortality and if they do, they tend to refer to the lifespan of relatives like grandparents or elderly uncles and aunts. In truth, we can live much longer and also more active lives. While this is clearly good news, the funding costs are much higher than we might imagine and that is before considering the potential costs of care in our twilight years.

Invest early for good retirement income

As with all areas of investing, the earlier you start the better, as assets have more time to grow and benefit from the effect of compounding. It is a big mistake to think that you can put off your retirement savings until you are in your 50s. By the time you are in your 50s, you may not have enough time left to build up the financial resources you need to retire in your early to mid-60s, so the first pound you invest will be your more valuable.

Evaluate the right level of risk

One of the main challenges is to take sufficient risks. A younger investor, with a very long-term horizon, should invest mainly in equities to accumulate a sufficient pot of assets. But even those nearing retirement need to be very careful not to lower their risk too soon. Previously, most people with a defined contribution pension started to switch from stocks to bonds as retirement approached, so the value of the pension fund would not be vulnerable to liquidation. market on the eve of a decision to buy an annuity. The old theory is that you should “own your age in bonds,” which means that a 50-year-old should have 50% of their pension in bonds rather than in stocks. In my opinion, this is no longer true.

Draw decisions

As more and more people avoid annuities and decide to keep their pensions and withdraw income instead, it is very important that the portfolio continues to grow ahead of inflation, otherwise the pension might be depleted too quickly, leaving the retiree short of assets. halfway through retirement. If you are considering going the withdrawal route, it is really essential that you make sure that you don’t deplete retirement assets too quickly and that you revisit your strategy every year. Ideally, you should project your costs and likely income needs and ensure that the natural income from the pension will be enough to meet them (alongside any state pension), then manage the portfolio with an asset mix. to ensure the value of the plan in real terms will not be eroded by inflation. In effect, this means continuing to have some exposure to the stock markets until retirement.

Pensions for estate planning

For some people, namely those who have other assets – like ISAs or property – that can be used to fund their retirement, it may make sense to leave their pensions intact for as long as possible. This is because modern pensions are incredibly tax efficient from an estate planning perspective. Unused pensions can be inherited by your beneficiaries without paying inheritance tax. If you die before age 75, annuities are inherited in full tax-free and after age 75, beneficiaries will pay tax at their marginal income tax rate as they are withdrawn. So for wealthier savers, a pension may not be a retirement savings plan at all, but an estate planning tool.

Jason Hollands is Managing Director, Business Development and Communications, Tilney Investment Management Services

Further reading: Women’s pensions should be addressed as they save less than men

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