On January 17, 2020, many debt mutual fund investors with Franklin AMC woke up to a nasty surprise. NAVs of many popular debt mutual fund schemes from Franklin had gone down by 4-7%. Why did this happen? Many of Franklin debt mutual fund schemes held debt issued by Vodafone-Idea. What about Vodafone-Idea? On January 16, 2020, The Supreme Court of India dismissed the … [Read more...] about Loss in Franklin Debt Mutual Funds: What should you do?
debt mutual funds
In the first week of December 2019, the Government paved the way for the launch of Bharat Bond ETF. The Bharat Bond ETF will invest in bonds issued by various public sector units. From the investors’ perspective, it is a new investment option in the fixed income space. The Bharat Bond ETF is an easy and low-cost way to invest in bonds from public sector entities. From the … [Read more...] about What is Bharat Bond ETF? Should you invest?
You got Rs. 10 lacs with you. You know you would need the money or at least some portion of it within 3 years. Where would you invest that money? A Bank Fixed Deposit or a Debt Mutual Fund? Let's assume debt mutual funds have as low risk as FDs and FDs are as flexible as debt MFs. The only difference is in tax treatment. And that both return 8%. After 1 year, you … [Read more...] about Need money within 3 years: Bank FD or a Debt Mutual Fund?
If you are an investor in debt mutual funds, do keep an eye on the size of your fund scheme. It is a red flag if the size of your debt fund scheme has gone down sharply. If your fund scheme has experienced sharp outflows, you need to investigate. What is the problem if the size of my debt fund scheme has gone down sharply? If your fund scheme is experiencing fund … [Read more...] about A Sharp Decline in Debt Mutual Fund Size is a Red Flag
SEBI, in June 2019, made a few changes to investment guidelines and valuation of securities in debt mutual funds. These changes enhance credit and liquidity profile of the liquid funds. At the same time, these changes can make liquid funds a bit volatile. Let’s try to understand the new SEBI rules. #1 Liquid funds are now required to hold 20% in liquid … [Read more...] about Liquid Funds to have exit load and will now be a bit volatile
Debt mutual funds are again in the news. On June 4, 2019, DHFL could not make the interest payment on one of its bonds. It says that it will pay in another week. Does not matter. Even the slightest delay is considered a default. As per extant rules, even if a default happens in one security by DHFL (not the one held by the fund scheme), the value of the all the bonds from … [Read more...] about The DHFL Mess: Learnings and What should you do?
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?
Every few months, we see Non-convertible debenture (NCD) issues from various companies. As on date (September 7, 2019), the NCD issues from Tata Housing, Aadhar Housing Finance and IndiaBulls Commercial Credit are live. Should you invest in such NCDs? Well, in this post, I will not review any particular issue of NCD. I will focus the benefits and risks involved in investing … [Read more...] about Should you invest in Non-Convertible Debentures (NCDs)?
Equity funds are risky but debt funds are safe. Isn’t that what most of us think? That is clearly not the case. Debt funds carry risk too, something that is ignored by many investors. Many argue for debt mutual funds as a replacement for bank fixed deposits. In fact, I have written a post comparing debt mutual funds and fixed deposits and how debt mutual funds can … [Read more...] about Don’t ignore the Risk in Debt Mutual Funds