Debt MF on WebNotes

Debt MF vs FD: comparative analysis (post-2023)

Tue, 19 May 2026 00:00:00 +0000

The Debt Mutual Fund vs Bank Fixed Deposit (FD) comparison was materially changed by the April 2023 debt mutual fund taxation reform that removed indexation. Pre-2023, long-term debt MFs were structurally more tax-efficient than FDs for high-bracket investors. Post-2023, the playing field is more level, though debt MFs retain other advantages (yield, liquidity, currency vs interest-rate exposure).

For Indian retail investors and corporate treasuries, the comparison now hinges less on tax efficiency and more on yield differentials, liquidity needs, and risk tolerance.

DHFL default impact on mutual funds

Tue, 19 May 2026 00:00:00 +0000

The 2019 default of Dewan Housing Finance Corporation Limited (DHFL), a major Indian housing finance NBFC, caused significant impact on Indian debt mutual fund schemes holding DHFL bonds. The DHFL event, following soon after the IL&FS default (2018) , deepened the NBFC liquidity crisis and contributed to the cumulative regulatory response that shaped Indian debt mutual fund framework.

For Indian retail investors, DHFL was a major housing finance brand prominent in mass-market lending. Its collapse caused both direct losses (for those who held DHFL bonds or fixed deposits) and indirect mutual-fund-mediated losses (for schemes holding DHFL paper).

Franklin Templeton April 2020 wind-up

Tue, 19 May 2026 00:00:00 +0000

In April 2020, Franklin Templeton Asset Management India announced the wind-up of six debt mutual fund schemes, citing inability to meet redemption pressure amid COVID-19 stress in corporate-debt markets. The event affected approximately Rs 25,000 crore of investor money and triggered SEBI investigation, Supreme Court proceedings, and lasting regulatory reform of the Indian debt mutual fund segment.

For the Indian mutual fund industry, the April 2020 event remains the most significant adverse event in recent memory and serves as the principal case study driving subsequent regulatory responses including the Corporate Debt Market Development Fund (CDMDF) and revised liquidity-stress-testing frameworks for debt schemes.

Gilt fund with 10-year constant duration

Tue, 19 May 2026 00:00:00 +0000

A Gilt fund with 10-year constant duration is a SEBI-defined debt mutual fund category that invests in Government of India securities while maintaining a portfolio Macaulay duration close to 10 years on an ongoing basis. Unlike general gilt funds , which can hold G-Secs across the maturity spectrum at the manager’s discretion, the constant-duration variant has a structural duration target making it a more pure-play interest-rate-sensitivity vehicle.

For Indian investors who want predictable long-duration interest-rate exposure (e.g., for ALM matching, retirement-corpus construction, or thematic bets on falling rates), this category provides pure G-Sec credit quality (sovereign), predictable 10-year duration profile, and high interest-rate sensitivity.

IL&FS default impact on mutual funds (2018)

Tue, 19 May 2026 00:00:00 +0000

The September 2018 default of Infrastructure Leasing & Financial Services (IL&FS), India’s then-largest infrastructure NBFC (Non-Banking Financial Company), caused widespread impact on Indian debt mutual fund schemes holding IL&FS bonds. The IL&FS collapse triggered:

A liquidity crisis in the Indian NBFC sector.
Significant losses in debt mutual fund schemes with IL&FS exposure.
Major regulatory response including IL&FS resolution under the Insolvency and Bankruptcy Code (IBC).
Lasting impact on Indian debt mutual fund regulation and risk practices.

For Indian retail investors, the IL&FS event highlighted concentration risk in debt schemes and demonstrated the systemic importance of NBFC asset quality.

JPM Amtek incident (2015)

Tue, 19 May 2026 00:00:00 +0000

In August 2015, JPMorgan Asset Management India’s two debt mutual fund schemes were exposed to a default by Amtek Auto Limited, an Indian auto-components manufacturer. The Amtek Auto bonds held in JPMorgan’s debt schemes faced credit deterioration leading to redemption pressure that the AMC could not meet at fair prices. The event was one of the earliest major debt-mutual-fund crises in India and contributed to the policy thinking that later produced the side-pocketing framework (2018) .

Liquid mutual fund

Tue, 19 May 2026 00:00:00 +0000

A Liquid mutual fund is a SEBI-defined debt mutual fund category investing in money-market and debt instruments with residual maturity up to 91 days. Liquid funds are among the most widely-used mutual fund categories in India, serving as a high-yield alternative to bank savings accounts and sweep-in fixed deposits for short-term cash parking. The category was formalised under the SEBI October 2017 categorisation framework alongside other debt sub-categories.

For Indian retail investors and corporate treasuries, liquid funds offer:

How to invest in Parag Parikh Liquid Fund (parking surplus)

Sun, 17 May 2026 00:00:00 +0000

The Liquid Fund is where short-horizon cash sits. A salary inflow you’ll redeploy next month, a tax refund waiting for the next equity SIP, a property-sale advance, a maturity from another investment, the emergency fund itself, anything you want to earn slightly more than a savings account on while keeping it accessible in a business day or two. PPFAS has two routes for it: the standard SelfInvest portal (full transactional control, all schemes in one view) and the dedicated CashFlex mobile app (launched 21 June 2024, focused on the cash-management use case with a slicker interface and the T+0 Instant Access Facility front-and-centre). Both share the same SelfInvest credentials and the same underlying folio.