Tax free returns better than NRE FD





HSBC India Fixed Income AM30 fund




Downside Risks


1. Rupee weakens due to covid or border tensions

2. RBI increases deposit rates due to Inflation






2 thoughts on “Tax free returns better than NRE FD”

  1. There is an expense ratio of 1.47% for fund, which is why I didnt consider it. The duration of the fund is about 5 years, so you can compare this with Bharat bond 2025. Although the fund manager has the ability to vary the duration and time the interest rate cycle, I am not sure of the track record of the fund.

    In my view, the advantage of using this fund is that you want to keep your funds in SGD and avoid taxes and also have an India Fixed income play.

    The yield to maturity of 5 year duration has now fallen to around 5%. So you can expect around that kind of returns in INR terms minus the expense ratio, if yields remain like this.

    Liked by 1 person

    1. The NAV is adjusted for expense ratio so it becomes irrelevant for comparison purposes, the post compares nett return of nre fd vs the mutual fund. If the fund manager can generate good returns I don’t mind whatever fee they charge.

      I am expecting atleast one more rate cut which will help push the price of their bond holdings up. My strategy is to invest in this fund instead of transferring money to India as and when the exchange is 55.5 or more, though a monthly investment on or around middle of the month may yield better returns. The fund records dividend after 25 of each month

      Liked by 2 people

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