With Franklin Templeton Mutual Fund winding down six schemes, followed by Aditya Birla Sun Life Mutual Fund’s decision to close two schemes for investing has added to the woes of the already crippled debt investment market. [Read: Lessons Learnt from the Debt Fund Crisis] The severe liquidity crisis prevented investors from making redemptions and they have…
Modi 2.0 completes its first Anniversary on May 31, 2020. Preparations are on in full swing to highlight the “historic achievements” of the government (resorting to technology). Abrogation of Article 370, Article 35A, construction of Ram Temple (after the Apex Court’s verdict), the contentious Citizen Amendment Act (CAA) and the National Register of Citizens (NRC)…
After moderate recovery in April, markets turned volatile again in May. Recent relief package/s the government announced to fight the numbing impact of COVID-19 failed to cheer the market, while the extension of the lockdown further raised concerns over economic growth. However, it is advantageous to stay invested even during an economic slowdown to reap…
These are tough times for debt mutual fund investors. On the one hand, there has been a recent instance of Franklin Templeton Mutual fund winding up six of its debt schemes that had a very high-risk exposure to low rated and toxic debt papers (and cited COVID-19 dislocations to put a stop to losses); and on the…
The AMFI data for the last few months shows that large cap funds have been attracting higher inflows as compared to riskier categories such as mid and small cap funds. Large caps are better placed to handle economic shocks such as the one we are facing now as these companies have strong balance sheet and…
The pandemic crisis has caused high volatility and uncertainty in financial markets. This has induced a flight to safety and higher liquidity. Liquid funds are perceived to be the safest in the debt funds category. This category of funds invest in debt and money market instruments such as Certificate of Deposits (CDs), Commercial Papers (CPs),…
On the eve of May 12, 2020, the Prime Minister of India, Narendra Modi, announced a massive stimulus package worth Rs 20 lakh crore (purportedly almost 10% of India’s GDP, but in reality around 1% of GDP) to counter the Coronavirus or COVID-19 crisis and said it will cover farmers, labourers, the middle class, the…
It is quite intriguing that whenever mutual fund schemes perform well, fund houses attribute the success to their investing prowess but whenever something goes wrong, they point at unforeseen challenges. This is bizarre and improper because asset management companies and fund managers are also supposed to deal with challenges in play and limit the downside…
The impact of this extended lockdown (3.0) on small and medium enterprises could be overwhelming due to their limited ability to absorb economic and financial shocks. As a result, recovery vide earnings will take time even after restrictions are lifted. Stocks of mid and small caps may therefore face selling pressure. The Finance Minister recently…
In the current times, debt mutual funds are proving to be theoretically right but practically imprudent. Whenever they lose investors’ money, mutual fund houses take refuge under the standard disclaimer: Mutual Fund Investments are subject to market risks, read all scheme related document carefully. Plus, debt mutual funds are often misleadingly presented to investors as low-risk…
