Few #MutualFunds are increasingly opting for an inter-scheme transfer of corporate bonds from credit risk funds to other schemes of the same AMC in order to repay #investors. (1) @bsindia @CNBCTV18Live @ETNOWlive @OutlookMoney @livemint
Data from @SEBI_India shows the number of inter scheme transactions during April rose to 829, worth a total value of INR 21,815 crores from 680 transactions INR 22,453 crores in March & 419 transaction worth INR 15,577 crores in February. (2) @FinancialTimes @OutlookMoney
Now, inter-scheme transaction brings with it its own set of problems. If the security being transferred is of low grade & therefore, less liquid, it would expose the other schemes to unwarranted risk. This would be unfair to #investors in those #mutualfunds (3) @OutlookMoney
Further more #mutualfunds are selling securities in open market to meet redemptions. They are liquidating low rated securities in market at deep discount due to troubles in #debt market i.e. Distress Selling. (4) @cafemutual @wealthforum_tv @bsindia @OutlookMoney @CNBCTV18Live
This raises concern on whether #mutualfund houses are keeping in mind preservation of value for its #investors! Though, we @MMFA_IN
believe that they are but the same is beyond our control & we as #IFIs must focus on our key role. (5) @fifaindiaorg @cafemutual @wealthforum_tv
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