Credit risk funds’ AUM see 26% fall in a week

Mumbai: In just one week after Franklin Templeton MF’s shock-decision to close down six of its debt funds late on April 23, all the credit risk funds, the high-risk-schemes at the centre of the crisis, together saw a Rs 12,569-crore or nearly 26% slide in total assets under management (AUM).

From managing Rs 48,576 crore on April 30, AUM of 20 credit risk funds fell to Rs 36,008 crore by April 30, latest data from industry body Amfi showed. Part of this slide could be attributed to fall in prices of their assets, but most of it was due to redemptions by investors, industry players said.

The silver lining, however, is that the pace of redemptions from credit risk funds abated substantially after the RBI on April 27 opened a special funding window for fund houses, Amfi officials said. According to RBI data, in three days since the Special Liquidity Facility for Mutual Funds (SLF-MF) started, banks borrowed Rs 6,000 crore through this scheme.


According to an Amfi release, as of April 24, redemptions net of funds mobilised by all the credit risk funds in the industry, was Rs 2,949 crore, which peaked at Rs 4,294 crore on April 27. It was on that day the RBI announced a Rs 50,000-crore, 90-day borrowing window for fund houses.