https://v2.webnotes.in/tags/mark-to-market-debt-mf/Recent content in Mark-to-Market-Debt-Mf on WebNotesHugoen-INTue, 19 May 2026 00:00:00 +0000https://v2.webnotes.in/mark-to-market-debt-mf/Tue, 19 May 2026 00:00:00 +0000https://v2.webnotes.in/mark-to-market-debt-mf/<p><strong>Mark-to-market (MTM) valuation</strong> in debt mutual funds means underlying bond holdings are valued daily based on prevailing market prices rather than amortised cost. SEBI mandated MTM for most debt-fund holdings from the early 2010s and tightened the framework periodically.</p> <h2 id="mtm-mechanics">MTM mechanics</h2> <h3 id="daily-valuation">Daily valuation</h3> <ul> <li>Each bond holding valued at daily-published market price.</li> <li>For liquid bonds: market quote-based.</li> <li>For illiquid bonds: model-based valuation per <a href="https://v2.webnotes.in/mutual-fund-valuation-agencies/" rel="nofollow">mutual fund valuation agencies</a> .</li> </ul> <h3 id="impact-on-nav">Impact on NAV</h3> <ul> <li>Interest-rate moves directly affect NAV.</li> <li>Credit deterioration mark-downs immediate.</li> <li>Provides transparent daily NAV reflecting current portfolio value.</li> </ul> <h2 id="pre-mtm-amortised-cost">Pre-MTM: Amortised cost</h2> <p>Before MTM:</p>