Category: Mutual Funds

“Risk Aversion Mode” is on amongst Debt Mutual Funds

Having witnessed a series of defaults including IL&FS, DHFL etc – debt mutual funds over the past eighteen months have been steadily increasing their exposures to government/quasi government entities. This trend has accelerated post the Franklin fiasco and Covid pandemic. In June, for the first time in recent times, overall debt mutual funds exposure to Government securities as percentage of debt AUM entered into double digits. Additionally, exposure to Treasury Bills also crossed two lakh crores for the first time. […]

Credit Debt Funds get a breather from redemptions

Credit risk category mutual funds saw a steady decline in their assets under management last fiscal as the AUM decreased from INR 81,000 Crs at the beginning of FY 20 to almost INR 55,000 Crs by the end of the fiscal year. The Franklin fiasco exacerbated the trend and the AUM fell sharply to INR 36,000 Cr by end of April and further fell to INR 30,000 Cr by end of May. However, in what would be as a sigh […]

Mutual Funds deployed whopping one lakh crore in T-Bills

Mutual fund exposure to Treasury Bills increased to INR 1.82 lakh Cr in May’20 registering month-on-month increase of more than rupees one lakh crore ( the exposure to T-Bills in April was 0.816 lakh cr). Treasury bills or T-bills are short term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day. Treasury bills are zero coupon securities and pay no interest. Instead, they are issued at […]

Most Debt Mutual Funds witness good inflows – of course except for credit category !

Asset under Management data as on 29th May’20 (last working day of the month) shows that most of the debt mutual fund schemes witnessed good growth on a month-on-month basis – as illustrated below. Category wise AUM for May’20 : Category NameAUM as on May end (Crs)% Change (m-o-m)Liquid Fund4,95,04522%Short Duration Fund94,8284%Corporate Bond Fund91,6576%Banking and PSU Fund89,37613%Overnight Fund86,6385%Low Duration Fund77,1573%Ultra Short Duration Fund72,4575%Money Market Fund63,95115%Floater Fund32,4313%Credit Risk Fund30,262-16%Medium Duration Fund19,878-8%Dynamic Bond Fund17,0661%Gilt Fund16,28419%Medium to Long Duration Fund9,9203%Long Duration Fund2,31418%Gilt Fund […]

“Ripple effect” of Franklin upheaval

As it being covered so extensively in all media, the shutdown of six debt schemes by Franklin Templeton can have far reaching implications. The article examines the immediate and mid-term ripple effect of the Franklin upheaval. A) Impact on portfolio companies of credit focused funds : While a lot has been written about the pain fund investors will have post this stress , an aspect which has gone un-noticed is the impact on portfolio companies. Mutual funds normally try to […]

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