Got mail about some downgrade in debt mf ,don’t know should I opt out of it or stay…
Bhuvan
August 9, 2019, 8:11am
2
This isn’t an email about a downgrade. This email is regarding an update to the Scheme Information Document allowing for side pocketing in the event of a credit event such as a default or a downgrade.
This post explains what side pocketing is:
Interesting development. SEBI now allows side-pocketing in mutual funds. To give you a gist, let’s take the example of IL&FS. Many mutual funds which were holding IL&FS paper marked down the value and some cases wrote off the value of the paper. The new system allows the AMC to sperate this paper from the main fund and split the NAV, hence the term “side-pocket”. The risky portfolio that will be separated consisting of the illiquid/default securities will have a separate NAV but won’t be open fo…
1 Like
