Two fund houses - PGIM India MF and Principal MF have increased the frequency at which they disclose their portfolio holdings in fixed income funds.
While PGIM India MF has started disclosing portfolio of its short duration funds like PGIM Overnight Fund, PGIM Insta Cash Fund, PGIM Money Market Fund and PGIM Ultra Short Term Fund on a daily basis, Principal MF discloses their fixed income portfolio across all scheme category fortnightly.
Sharing the rationale, Ajit Menon, CEO PGIM India said that the move aims to regain confidence of investors in debt funds which was affected due to a series of credit events. “It is important that our distribution partners and investors have conviction in the quality of our funds and processes. Hence, we have decided to disclose our portfolios having short term papers on a daily basis for four months at least. Also, many distributors have given us feedback that they would like to know what’s happening in the fund portfolio on a daily basis. At times, a section of investors redeems their investments soon after any credit event. This led fund managers to sell high quality papers and hold illiquid papers. However, investors and distributors get to know this only after a while. With daily disclosure, distributors will be able to assess what is happening in the fund.”
He further said that many investors invest in short term debt funds for short term needs such as repaying loan, creating emergency corpus and so on. Daily disclosure will help them make more informed choice, he said.
In a recent interview, Bekxy Kuriakose, Head Fixed Income, Principal MF said that the fund house has increased the frequency of disclosure in debt portfolios. She said, “We provide fortnightly disclosure of our debt portfolios on our website. This disclosure provides details on each investment in the fund’s portfolio. Principal also publishes a note on select issuers that we hold in our portfolios on a monthly basis.”
A Mumbai MFD requesting anonymity said that the move would bring transparency and rebuild trust of distributors and investors in debt funds. He said, “Ideally, short term schemes like overnight funds require daily disclosure as they hold papers having one day maturity. In my view, other AMCs should follow this disclosure practice to improve disclosure standards.”
Debt guru, Joydeep Sen believes that while the move would increase transparency, it will not have much impact on investors and distributors. “The MF industry is already transparent in all fronts with daily disclosure of TER, AUM, performance and so on. However, only a few investors and distributors check this information on a daily basis.”
