SEBI has modified investment norms for debt mutual funds for investing in bonds that are quasi-equity in nature. Such bonds can be made to absorb losses before equity or may be convertible to equity in case of a specified event. Additional Tier 1 and Tier 2 bonds (AT1 and AT2) are such bonds. The rules come into force on April 1, 2021. What are AT1 and AT2 bonds? These … [Read more...] about New SEBI Rule about Perpetual Bonds: How it affects Debt MF Investors?
debt mutual fund categories
Debt mutual funds are not without risk. When a default or a rating downgrade of an underlying security, NAV of the fund takes a hit. Not just that, it poses an additional problem. In such cases, some of the more knowledgeable investors can benefit at the expense of less aware investors. SEBI has come out with a circular to address the issue. What is the issue if there is a … [Read more...] about What is Side Pocketing in Debt Mutual Funds? How it helps?
SEBI has specified many categories of debt mutual funds. In this post, let’s talk about money market funds. I will address common questions about money market mutual funds in this post. Where do Money market funds invest? What are money market funds? Who should invest in money market funds? How much return you should expect? What you should keep in mind while selecting a … [Read more...] about What are Money Market Mutual Funds?
Over the past few years, we have seen debt mutual funds being promoted as a replacement for fixed deposits. I do not deny that there are a few clear benefits and debt mutual funds may provide better tax-efficient returns as compared to bank FDs. However, the return of principal is more important than return on principal. And the events of the past few years (ILFS default … [Read more...] about How to select a Liquid Fund?
SEBI had initiated categorization and rationalization of mutual fund schemes vide its circular dated October 6, 2017. SEBI specified a few fund categories and mandated each fund house could have just one fund in each category. The aim was to reduce the number of funds and make life easier for investors by reducing confusion around scheme names. For more on SEBI categorization … [Read more...] about Different Types of Debt Mutual Funds (SEBI Categorization Rules)