Why Franklin India Ultra Short Bond Fund fell more than 4% on 16th Jan 2020?

A side pocket can only be created if there’s a rating downgrade below investment grade. Vodafone debt is still rated as BBB-. Unless they are rated Junk, a side pocket cannot be created.

Unfortunately, there’s no easy answer here. If you exit now, you’ll lose out if the situation is resolved and Vodafone makes good on its obligations.

It’s wise to always think back as to why you invested in the fund(s) in the first place and see if that holds good. Chasing returns in debt funds is always a bad idea. Hight returns are possible only with high-risk.

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