Two HSBC Mutual Fund debt plans report 9-10% erosion in NAV

The net asset values (NAVs) of HSBC Mutual Fund’s debt schemes fell 9-10% on Friday after the fund house marked down the value of stressed finance company DHFL’s securities. HSBC Short Duration Fund with assets of Rs 279 crore and HSBC Low Duration Fund with assets of Rs 107 crore saw their NAVs fall by 9% and 9.74%, respectively, on May 8.

“Given that recovery of money in foreseeable future seems difficult and the economy downturn triggered by the pandemic is only expected to accelerate in the near term, we have decided to further mark down the matured DHFL NCDs from 75% to 100%,” said a note to investors from HSBC MF.

On April 30, four debt schemes of Principal Mutual Fund holding papers of DHFL saw their NAVs fall by 4.5- 6.8%.


“The likelihood of the resolution process being delayed and the relatively low possibility of realising value in the current market environment, the effect of which is likely to continue for a prolonged period and the continuing redemption in the funds house’s fixed income funds leading to a risk of potentially higher concentration of DHFL in the portfolio, we have marked down the value of receivables of DHFL to zero in the interest of investors,” said Principal Mutual Fund.