The collapse of Franklin Templeton’s debt schemes added to panic redemption
SEBI has allowed mutual funds to invest additional 15 percent AUM in G-Sec, T-bills.
The Association of Mutual Funds in India (AMFI) has written to the Securities and Exchange Board of India (sebi) seeking investment in G-Sec, T-bills for Corporate Bond Fund, Banking & PSU Fund, and Credit Risk Fund.
Responding to AMFI, SEBI has said mutual funds can invest additional 15 percent AUM in G-Secs & T-Bills in corp bond, banking & PSU and credit risk funds.
SEBI has also Increased investment in G-Secs & T-Bills is optional not mandatory.
SEBI has revised the scheme characteristic for all three schemes. For Corporate Bond Funds, SEBI said minimum 65 percent of total assets must be in AA+ rated papers while minimum 50 percent of total assets should be in AA & below papers.
In case of banking & PSU Funds, minimum 65 percent of total assets must be in debt instruments of banks & PSUs.
This comes in the wake of fund houses witnessing redemption pressure in these three categories..
Fund managers said the credit risk fund category was reeling under the stress of redemptions as most of the fund houses had their underlying assets deployed in highly illiquid corporate bonds.
The collapse of Franklin Templeton’s debt schemes added to panic redemption.
