Ajay Tyagi, Chairman, SEBI (Securities and Exchange Board of India), asks India’s MF managers to be cautious in debt mutual fund investment schemes, on August 23, 2018.
The Market Regulator’s chief said that the debt mutual fund managers in our country need to be cautious and properly value their investments in corporate papers, while a huge amount of money comes from institutional investors.
Institutional investors are business organizations which collect money to purchase securities, real property, and other investment assets. They include investment banks, REITs, commercial trusts, hedge fund investors, money managers, mutual funds, endowments, insurance companies, etc.
The average AUM (Assets Under Management) of Indian MF industry for the month of July 2018 is about 24 lakh crore Rupees and is expected to reach 50 lakh crore Rupees in the next five years.
Of the total AUM of about 12.3 trillion Rupees at debt mutual fund investment schemes, 11.5 trillion Rupees is coming from non-retail investors, according to the SEBI chief.
The Chairman of SEBI also stated that it is for the MF industry which bears the credit risk.
The problem is in their records when they hold these debt securities, either short-term or long-term. Tyagi added that the MF managers have to be cautious of credit risk and how to value their investment on their records, reported REUTERS.
While talking to reporters during the AMFI Mutual Fund Summit 2018, the SEBI chief said that individual people must be cheered and encouraged to invest directly if they have the capability to manage it on their own.
NS Venkatesh, CEO of AMFI, also supports to encourage direct investments by aware investors. However, according to Santosh Mishra, founder, and CEO, Vashishtha Capital, new investors involving in direct investments most certainly would escape the market volatility and market falls, reported The Economic Times.
According to the SEBI’s Chairman Tyagi, who recently advises Indian MF managers to be cautious in debt mutual fund investment schemes, individuals who cannot manage to make investments on their own must apparently get help. But, the direct investments must be easily accessible by the aware investors.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]