Pune: Following the announcement of winding up of six income-oriented debt schemes by one of the asset management companies (AMC), the Association of Mutual Funds in India (AMFI), the mutual fund industry body, on Friday assured investors that a majority of fixed income mutual fund assets under management (AUM) is invested in superior credit quality securities and schemes have appropriate liquidity to ensure normal operations.
AMFI recommended that investors continue to focus on their --investment goals, consult their financial advisor and not get side-tracked by an isolated event in a few schemes of one fund company.
The action taken by the particular AMC is limited to the six specific income-oriented debt schemes managed by the said AMC. The AUM of these six schemes constitutes less than 1.4 pc of the Indian Mutual Fund Industry's aggregate AUM as on March 31, 2020.
Liquidity, maturity profile and credit quality for debt funds is appropriate for day-to-day operations to continue uninterruptedly, stated the body.
Sharing his views, AMFI chairman Nilesh Shah said, "Banking
liquidity above Rs 700,000 crore, Long Term Repo Operations (LTRO) conducted by the RBI, expectations of further rate cuts and operation twist by the RBI is likely to keep bond market liquid and normally functioning in current challenging times."
"The Mutual Fund industry remains fully committed to investor interests, and there is no need for them to panic and redeem their investments. The industry continues to remain robust like in 2008 sub-prime crisis or 2013 taper tantrum crisis," Shah added.
Making the investors aware AMFI chief executive, NS Venkatesh said, "The Mutual Fund industry has seen many cycles and its professional fixed income fund managers have managed crises efficiently over the years. Investors continue to repose trust in the industry, and over the last five years, the Indian MF Industry AAUMs have doubled from Rs 11.88 lakh crores as on March 31, 2015, to Rs 24.70 lakh crores of AAUM as on March 31, 2020."