The Indian fund unit of Deutsche Bank sad on Wednesday it has launched a fixed income fund that will invest in government securities as it sees them coming to favour on expectation of softer interest rates.
DWS Gilt Fund, which would invest in an actively managed portfolio of government securities, joins India's 31 gilt funds that managed about 20 billion rupees at the end of August, data from the Association of Mutual Funds in India showed.
"With investors turning extremely risk-averse, we believe that this is an opportune time to invest in gilts," said Suresh Soni, chief executive Officer of Deutsche Asset Management.
"The possible return of a softer interest rates regime and single-digit inflation scenario can lead to a positive momentum in gilts," Soni, who also heads the investment team, added.
Between 2001 and 2003, such securities yielded an annualised return of 19.8 percent as a result of softening interest rates and relatively lower inflation, the firm said in a statement.
With the near-term expectation of slowing inflation and a softer interest rates regime setting in, gilts are expected to once again gain popularity, it added.
The benchmark 10-year bond yield fell to 7.94 percent on Wednesday after central banks around the world cut rates in a coordinated move to shore up the global economy.
DWS Gilt Fund, which would invest in an actively managed portfolio of government securities, joins India's 31 gilt funds that managed about 20 billion rupees at the end of August, data from the Association of Mutual Funds in India showed.
"With investors turning extremely risk-averse, we believe that this is an opportune time to invest in gilts," said Suresh Soni, chief executive Officer of Deutsche Asset Management.
"The possible return of a softer interest rates regime and single-digit inflation scenario can lead to a positive momentum in gilts," Soni, who also heads the investment team, added.
Between 2001 and 2003, such securities yielded an annualised return of 19.8 percent as a result of softening interest rates and relatively lower inflation, the firm said in a statement.
With the near-term expectation of slowing inflation and a softer interest rates regime setting in, gilts are expected to once again gain popularity, it added.
The benchmark 10-year bond yield fell to 7.94 percent on Wednesday after central banks around the world cut rates in a coordinated move to shore up the global economy.
Source: http://uk.reuters.com/article/fundsNews/idUKLNE49802B20081009
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