@siva
Nippon india balanced avantage fund idcw option haircut has bern showing 66% though growth option is still 10 % .
Why is this abnormaly high haircut for certain option of a scheme .
Please find attached image of zerodha plege portal
Hi @Ashish_Tyagi , It’s mainly due to higher risk (VAR) for that specific option, which leads to a higher haircut.
How idcw option can have 66% risk compared tp growth option 10% .
Can Amc reject redemtion of idcw option or nav of this option can swing 6 times more in same period .
Please explain logic that which Var criteria can be diffrent for growth vs idcw option when its not even etf redumption and liquidity will be taken care by Amc at any given day .
@nithin please give some logic i dont think this is done by cdsl its quite irattional
I see the same haircut % for this IDCW on groww , seems this is something which finalized from the Clearing corporation.
I think this higher margins are just bez these IDCW are been treated differently by CC ,
these IDCW sheme do dividend payout which adjust the nav accordingly which creates and artificial reduce in the collateral value hence increasing the risk
By that logic idcw of all mutual fund schems should have higher hair cut . And dividends of 0.5%to1% monthly are declared so its not drastic intraday change .
After ex dividend date nav reduces so as market vale and pledge margin .
I use 5 paisa and they still have same 10% haircut .
Balanced advantage funds are one of the least risky equity funds relatively when market falls 10% genrally they fall 4-5% only .
This is very concerning indeed!!
However, I see that the issue is not with the IDCW option but IDCW option of Nippon India. If you sort by descending haircut - First 2 pages are for Nippon India and mainly IDCW option.
Even then this makes little sense.
Only Nippon India IDCW funds are getting disproportionately high haircuts, with no clear link to actual risk.
This must be investigated further and urgently. Is there some underlying issue with AMC?
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Clearing corporation (CC) has increased the haircut for specific IDCW funds, but not for growth funds. We’re checking with CC for clarification.
Thanks will wait for update