InvestorQ : How is the situation of redemptions on credit risk funds in the aftermath of the Templeton case? Have the redemptions stopped?
prachi Patwardhan made post

How is the situation of redemptions on credit risk funds in the aftermath of the Templeton case? Have the redemptions stopped?

Answer
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4 months ago


According to latest data put out by AMFI, the pace of redemptions in credit risk funds has definitely reduced although the time frame may be too small to asses. As per AMFI, the net redemptions under credit risk funds had fallen by 81% after the RBI announced the Rs.50,000 crore special window for mutual funds. This is positive news for debt funds in general. Credit risk funds constitute about 5% of the total debt fund AUM but have been in the news for the wrong reasons after Templeton decided to summarily shut down six of its funds due to redemption pressures. That had led to a surge in redemptions in other debt schemes too. However, things seem to have improved with net redemptions in credit risk funds falling sharply after peaking on April 27. The bigger challenge is to have better regulation in fund selection and also ensuring greater transparency of the quality and maturity profile of assets.