Manage your Fixed Income Investing with Debt MF

Successful MF investing is all about goal-based investing and asset allocation. One should not ignore debt investing and one of the best ways to get exposure to debts financial instruments is via debt mutual funds. To make the debt investing attractive and safer for investors, the SEBI has placed caps on the share of assets an actively managed Debt Fund can park in a single company’s debt instruments. This is a welcome move for the debt mutual fund investors as the risk reward ratio can improve once the fresh directives get implemented. 

The recent move by SEBI will mean that a mutual fund scheme would not invest more than 10 per cent of its NAV in debt and money market securities rated ‘AAA’ issued by a single issuer. As far as the ‘AA’ rated instrument goes, the exposure should not be more than 8 per cent and for ‘A’ and below-rated companies, the exposure will be capped at 6 per cent. Our cover story in this issue highlights debt funds and how best to deal with them while keeping your financial goals in mind. The special story in this issue would be of interest to all those investors who want to know about solution-oriented funds. 

Don’t miss both the stories for anything as these will be extremely useful in setting and achieving your financial goals. The mutual fund industry net AUM stood at ₹40.38 lakh crore in November 2022 while mutual fund folios crossed all-time high at 13,97,55,150. SIPs witnessed modest growth with SIP contribution of ₹13,306.49 crore in November 2022 as compared to ₹13,040.64 crore last month. Index funds have shown positive inflows for the month of November 2022 at ₹8,601.73 from ₹5,075.68 in the month of October 2022. This goes to show the increasing preference for passive funds. Stay tuned, stay informed! 

Yogesh Supekar
Executive Editor