In this episode of Mutual Fund Corner, CNBC-TV18’s Sumaira Abidi spoke to Mohit Gang, co-founder & CEO of Moneyfront, on what are the rules of redemption for mutual funds.
Also Anubhav Srivastava, Partner & Sr Fund Manager of Infinity Alternatives, answered some viewer queries and also talked about the difference between exchange-traded fund (ETF) and exchange-traded products (ETP).
To know more, watch this video.
Franklin Templeton closing six of its schemes was not about bad credit but heavy redemptions had made the situation challenging amid the coronavirus crisis, said Ananth Narayan, professor, SPJIMR, adding that he expects the RBI and government to step in to ensure liquidity.
Franklin Templeton Mutual Fund on Thursday announced the closure of its six credit funds due to liquidity issues amid the coronavirus crisis.
The funds that will be shut are Franklin India Low Duration Fund, Ultra Short Bond Fund, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual Fund, Income Opportunities Fund, the company said in a statement.
“I do expect the RBI and maybe the government to step in right now. Fundamentally, the problem is that the liquidity in the secondary market for corporate debt stays limited. Last month in March, the redemptions from the non-liquid, non-overnight funds which is about Rs 7 lakh crore of AUM of mutual funds itself was over Rs 1 lakh crore. In addition, because of the global risk-off, you saw FPI selling bonds as well. So the system is simply not geared towards handling these kind of redemptions at one shot. This is not about insolvency or about bad credit,” Narayan said.
“I think the whole market was a non-AAA space. There has been so much fear that extended lockdown will result in some of these non-AAA companies moving from a liquidity situation to maybe an insolvency situation — that has resulted in a run on the Franklin Templeton ,” added Dhruv Mehta, chairman of Foundation of Independent Financial Advisors.
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Tomorrow, stock exchanges are open but mutual funds are closed for subscription and redemptions, said Omkeshwar Singh, head of mutual fund distribution business at Samco.
Mutual funds investors will not be able to make fresh investment or sell their units on the Budget day because subscription and redemption are closed on Saturdays and Sundays, industry officials said.
Mutual funds subscriptions and redemptions will not be permitted because all the fund houses in their scheme information documents have declared Saturday and Sunday as “non-business day”.
Consequently, mutual funds investors will not be able to participate like others participants in stock markets.
Tomorrow, stock exchanges are open but mutual funds are closed for subscription and redemptions, said Omkeshwar Singh, head of mutual fund distribution business at Samco.
Investors through equity and derivatives can participate but investors through mutual funds will not be able to participate, he added.
In case of any change in non business day, fund houses need to issue notices to investors and publish advertisements in leading newspapers which is a lengthy process.
Stock markets will be open for normal trading on February 1, Saturday, when the Union Budget will be presented by Finance Minister Nirmala Sitharaman.
Trading would be conducted during normal hours from 9 am to 3.30 pm.
According to markets sources, the decision has been taken following requests made in this regard by market participants as Budget contains several market-moving announcements.
In 2015, stock exchanges were open for trading on February 28, Saturday, when then Finance Minister Arun Jaitley had presented the Budget.
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Daily Newsletter
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -72.15 |
| sensex | ₹1,882.60 | +28.30 |
| nifty IT | ₹2,206.80 | +30.85 |
| nifty bank | ₹1,318.95 | -14.95 |
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -7.15 |
| sensex | ₹1,882.60 | +8.30 |
| nifty IT | ₹2,206.80 | +3.85 |
| nifty bank | ₹1,318.95 | -1.95 |
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -72.15 |
| sensex | ₹1,882.60 | +28.30 |
| nifty IT | ₹2,206.80 | +30.85 |
| nifty bank | ₹1,318.95 | -14.95 |
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -7.15 |
| sensex | ₹1,882.60 | +8.30 |
| nifty IT | ₹2,206.80 | +3.85 |
| nifty bank | ₹1,318.95 | -1.95 |
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -7.15 |
| sensex | ₹1,882.60 | +8.30 |
| nifty IT | ₹2,206.80 | +3.85 |
| nifty bank | ₹1,318.95 | -1.95 |
| Company | Price | Chng | %Chng |
|---|---|---|---|
| Dollar-Rupee | 73.3500 | 0.0000 | 0.00 |
| Euro-Rupee | 89.0980 | 0.0100 | 0.01 |
| Pound-Rupee | 103.6360 | -0.0750 | -0.07 |
| Rupee-100 Yen | 0.6734 | -0.0003 | -0.05 |
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Sundaram Mutual Fund’s total assets under management (AUM) for the month of May stood at Rs 25.43 lakh crore as against Rs 25.27 lakh crore in the same period of the previous year. The net inflow was at Rs 516.4 crore versus Rs 458.6 crore the previous year. The month-on-month (MOM) ETF inflow — excluding …
Sundaram Mutual Fund’s total assets under management (AUM) for the month of May stood at Rs 25.43 lakh crore as against Rs 25.27 lakh crore
in the same period of the previous year. The net inflow was at Rs 516.4 crore versus Rs 458.6 crore the previous year. The month-on-month (MOM) ETF inflow — excluding gold, index fund — stood at Rs 2,432 crore versus Rs 4,259 crore outflow.
The net equity inflow inclusive of ELSS for the month of May came in at Rs 5,408 crore as against Rs 4609 crore MoM.
According to Sunil Subramaniam, MD and CEO of Sundaram Mutual Fund, the improvement in net equity inflows would continue despite the pressure owing to the DHFL ratings downgrade. “It would continue because a lot of reallocation would happen from debt to equity segment. Secondly, the election result will give a lot of confidence to people to invest,” he noted.
Talking about gross inflows and redemptions, he said: “Gross inflows are the way you look at fresh people coming in, while redemptions are a separate aspect – existing investors who have been in for a long time are booking profits. So one should look at gross numbers and redemptions separately. The gross number indicates that the confidence is rebounding in the market.”
“As long as gross inflow is a rising number, it indicates health in terms of outlook towards equity market in terms of flows. We have a strong new government in place and people are expecting FII flows to continue strongly because of the US-China trade war. World growth is slowing and liquidity will naturally flow towards the country recording highest growth, which is India,” he observed.
Despite the lower GDP numbers, India is among the fastest growing country in the world, Subramaniam pointed out.
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Daily Newsletter
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -72.15 |
| sensex | ₹1,882.60 | +28.30 |
| nifty IT | ₹2,206.80 | +30.85 |
| nifty bank | ₹1,318.95 | -14.95 |
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -7.15 |
| sensex | ₹1,882.60 | +8.30 |
| nifty IT | ₹2,206.80 | +3.85 |
| nifty bank | ₹1,318.95 | -1.95 |
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -72.15 |
| sensex | ₹1,882.60 | +28.30 |
| nifty IT | ₹2,206.80 | +30.85 |
| nifty bank | ₹1,318.95 | -14.95 |
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -7.15 |
| sensex | ₹1,882.60 | +8.30 |
| nifty IT | ₹2,206.80 | +3.85 |
| nifty bank | ₹1,318.95 | -1.95 |
| index | Price | Change |
|---|---|---|
| nifty 50 | ₹16,986.00 | -7.15 |
| sensex | ₹1,882.60 | +8.30 |
| nifty IT | ₹2,206.80 | +3.85 |
| nifty bank | ₹1,318.95 | -1.95 |
| Company | Price | Chng | %Chng |
|---|---|---|---|
| Dollar-Rupee | 73.3500 | 0.0000 | 0.00 |
| Euro-Rupee | 89.0980 | 0.0100 | 0.01 |
| Pound-Rupee | 103.6360 | -0.0750 | -0.07 |
| Rupee-100 Yen | 0.6734 | -0.0003 | -0.05 |
