Debt mutual funds, which were considered to be a safer investment, are rocked by some back to back bad events in the corporate sector. This has led investors to re-think on investing in debt mutual funds. DSIJ explains how to check this warning signal before investing in debt MFs.
The debt mutual funds that held debt securities of Essel and DHFL amounted to around 7,524 crore and 7,041 crore, respectively, at the end of December 2018. These papers formed around one percent of the total debt AUM during the same period. Hence, the defaults may not destabilize the entire debt category. Still, the debt mutual fund retains its status of being one of the safest avenues of investment, but investors need to be cautious and carry their own due diligence before investing in debt mutual funds.
High Concentration In One Issuer
This story is from the March 4, 2019 edition of Dalal Street Investment Journal.
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This story is from the March 4, 2019 edition of Dalal Street Investment Journal.
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