Safe IPO investments, private jet boom: Top personal finance stories

Instead of getting carried away by hype, investors must do a rational assessment of these offerings to determine if they are better bet than sector peers already available in secondary market

The Indian initial public offering (IPO) market in India is experiencing a surge in activity. These primary market sales are usually accompanied by a lot of hard selling. Instead of getting carried away by the hype, investors must do a cool-headed and rational assessment of these offerings to determine if they are a better bet than the sector peers already available in the secondary market. In this week’s lead story, Sanjay Kumar Singh and Karthik Jerome offer a guide for doing this analysis.

The anchor story by Namrata Kohli highlights the increasing popularity of private chartered jets in India, a trend showcased by the surge in their use during the Cricket World Cup. It outlines the advantages of private air travel for high-net-worth individuals and corporate leaders. Read this article for invaluable insights into private aviation and practical tips for those interested in this luxurious mode of travel.

One way fund managers try to generate alpha is by building a more concentrated portfolio. While these funds have the potential to deliver higher returns, they can also be more volatile. If you are keen to invest in a fund from this category, look up Morningstar’s review of Axis Focused 25.

If you are a conservative investor who finds it difficult to venture beyond the safety of fixed deposits (FDs), but would still like a few basis points of higher returns, consider investing in corporate FDs. Look up Paisabazaar’s table to learn about the ratings and returns of FDs from leading companies.

NUMBER OF THE WEEK

10.87%: Return offered by the first tranche of sovereign gold bonds

The first tranche of sovereign gold bonds (SGB) matured on November 30, giving investors an annualised return of 10.87 per cent.

Investors have further earned 2.75 per cent annual interest on these bonds. Those who held them till maturity will get tax exemption on capital gains.

Investors who have a minimum five-year horizon should opt for SGBs for their gold holdings. This is the minimum period after which they can redeem these bonds. They can also exit anytime by selling these bonds on the stock exchanges. However, they may not get a good price due to a lack of liquidity.

Investors must allocate at least 10-15 per cent of their portfolio to gold as it can provide a hedge against equity market volatility and is also known to provide protection against inflation.

Investors who don’t have a five-year horizon may allocate to gold via gold exchange-traded funds (ETFs) and gold funds which are more liquid and can be sold anytime.