News From Press Is it time to dump debt funds and go back to bank FDs?

Is it time to dump debt funds and go back to bank FDs?

Source: Livemint Oct 10, 2018

Along-standing bastion of so-called safe returns on the mutual fund street is showing signs of cracks. The recent downgrades of debt papers issued by Infrastructure & Leasing and Financial Services Ltd and its group companies and subsequent defaults in some of them have impacted mutual funds. A total of about 33 funds (across liquid, ultra short-term bond funds, short-term bond funds, credit risk funds and others) had these companies in their portfolios; the cumulative value of these holdings in these funds added up to ₹2,308 crore as on August-end 2018, according to data from Crisil Ltd. The percentage of IL&FS exposure in debt funds to the overall debt funds AUM (assets under management) is 0.17% (end-August).

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