InvestorQ : Is the COVID-19 likely to impact the performance of mutual funds in India and what is the extent of damage you see to mutual fund NAVs and performance?
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Is the COVID-19 likely to impact the performance of mutual funds in India and what is the extent of damage you see to mutual fund NAVs and performance?

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Anu Biswas answered.
11 months ago
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Two important developments globally - the spread of the Covid–19 virus and the meltdown in oil prices - have affected market sentiment and contributed to the high volatility and decline in the global equity markets, including India.

For India, the real economy has taken a hit with shopping areas, malls and parts of manufacturing shut down. These steps are essential to ****** the progress of the epidemic so that it can be controlled. However, this will hit businesses, esp. small businesses, and those who depend on them. Consumption demand will be impacted at least for a quarter. There is likely to be some need for forbearance on loans as businesses are undergoing stress. The banking system will have to support industry during

Mutual funds have been hit due to multiple reasons. Firstly, the debt funds are likely to be hit by increasing cases of corporate defaults as the cash flow position gets tighter. In addition, the institutional investors in debt funds are likely to exit the funds in panic and add to the volatility for the fund manager. In the case of equity funds, the correction in the market is just adding to the troubles of the segment and most of the NAVs have gone deep into the negative territory.

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