Mutual funds and truth
When a mutual fund tells you the truth, they tell you exactly that truth. Sometimes it is half, semi, part, black, white, or shades of truth.
When Hdfc amc told you that they have taken a Rs. 500 crore hit on their balance sheet, I would have seriously liked to know who was holding this Rs. 500 crores. Friends and Relatives? well I do not know.
There is a friend…who writes brilliantly, but writes too less…
http://mfcritic.blogspot.com/2019/06/cant-believe-fund-houses.html
aryan sharma
Great tips!
Your article was fantastic and very helpful for me . it really helped a lot.
thank you so much for shairng this article with us.
kamalgarg1958
I have read the appended blog.
In case of ICICI MF, frankly speaking, there was no truth in making the allegation by the author. The statement made by the representative was perfectly alright within the legal and moral meaning as on the date of the statement. We just can’t go on imagining all sorts of biases.
In case of Kotak MF, call to invest in Essel Group was of course not wrong. If you start doubting on all sorts of things in this world, then, there is no end to this. Essel Group with their flagship ZEEL and Essel Propack have not only been pioneers in their respective field, but have been doing good. Definition of business inherently includes risk element. Otherwise put your money in GoI Bonds – which btw also you can doubt whether the yields are rising and whether GoI will repay on the date of maturity or will roll it over – with no say from individual investors. After all, a government is a government.
pradeep
The context of the blog is that it was only luck that ICICI Pru got away with ILFS investment to the tune of 13% assets in a single FMP. The question of due diligence by MFs before investing into debt is lingering on.
Next, the investment in Zee zero coupon bonds is a shocker based on volatile collateral of Zee shares for every fund house. You cannot loan to promoters without proper due diligence for an FMP. The credit risk is huge for a fixed maturity plan. Its called reckless lending. Why on earth did they sell the shares on default?
The funds know it was huge mistake to invest in such instruments for FMPs.