With a view to safeguard the interests of investors in debt funds, SEBI recently tightened the norms for debt funds’ exposure to corporate bonds.
These regulations are a result of the sharp fall in value of two JP Morgan debt funds last year which had high exposure to bonds of Amtek Auto that were suspended/downgraded by rating agencies.
Recently, a rating downgrade by CRISIL saw the value of holdings on Jindal Steel & Power dip.
Most of us are unaware of the risks around debt funds, which invest in instruments such as government bonds, corporate bonds and other money market and short-term debt instruments.
Here’s what you need to know before investing in debt funds.
