News From Press High YTM in your debt mutual funds may be a red flag to watch out for

High YTM in your debt mutual funds may be a red flag to watch out for

High yield-to-maturity indicates high returns, but it also means that the fund may be taking higher risk

Mint May 4, 2020

The recent Franklin Templeton Mutual Fund fiasco, which saw it shutting six of its debt schemes, has once again highlighted the risks funds face when fund managers take aggressive credit calls to chase higher returns. Five out of the six Franklin schemes that were shut were among 10 open-ended debt funds with the highest yield-to-maturity (YTM), as per the March-end portfolios, according to data from Crisil.

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