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ETMarkets Special Podcast (ETMarkets.com)

Valuation tweak may hurt your debt fund returns, and how!

08:46 Min | September 11, 2019, 1:16 PM IST
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Sebi may soon make it mandatory for debt products to assign the latest market price to all their bond investments with effect from April 1, 2020.
Transcript
Hello there! This is Saloni Goel and you have tuned into ETMarkets' Special Podcast.

If you are a debt investor, then I have news for you..

The Economic Times reported this morning that Sebi may soon make it mandatory for debt products to assign the latest market price to all their bond investments with effect from April 1, 2020.

This may look like just another tweak in regulations, but it can have far-reaching impact on your debt fund investment, and how!

What does this change mean for you and me? How is it going to change you mutual funds universe? We caught up with Pavan Burugula from The Economic Times to break down this piece of news in layman's terms.

Hello Pavan, welcome to the show.

You broke this story in ET Print edition this morning about a certain shift in the way debt funds value their bond holdings which Sebi is going to enforce from April 1, 2020. Can you tell us in layman’s terms what is going to change and how?

Does it mean NAVs of debt funds will fluctuate more because of this change? And what will be the effect on the industry if that is the case?

But this also means more transparency and it will probably force fund houses to become more careful in choosing the debt papers where they would invest, ain’t it? That way the shift will actually end up benefitting debt fund investors.

Lastly, what do you make of the mutual fund investment flow data for August? Are there signs of improved risk appetite among investors?

Thank you Pavan for your time and solid insights. I'm sure our listeners have had a lot of takeaways. But we have to wrap it here. However, don't forget to tune into EtMarkets for much such insightful podcasts and to keep a tab on what's buzzing in market. Good bye.
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