A story I wrote yesterday for the news organisation I work for currently:
MF debt exposure to money mkt & short term paper rises in Jul-Aug
Debt funds chose to maintain a high investment presence at
the lower end of the yield curve for the second consecutive month in August,
an analysis of the latest mutual fund deployment data from Securities and
Exchange Board of India released on Wednesday showed.
Investments by debt funds, gilt funds and balanced funds collectively
held 20.1% of their aggregate debt assets in money market securities at the
end of August. It followed a 22.8% exposure to money market securities as of
July-end and a 15.0% one as of end of June.
The analysis excluded liquid funds since they have to mandatorily stay
invested in money market securities having maturity less than three months.
Excluding the assets held by liquid funds, the total debt assets of
mutual fund schemes totalled 9.60 trln rupees as of August-end of which 1.93
trln rupees were invested in debt securities having maturity of less than 90
days, the data under review showed.
From June-end to August-end the aggregate debt assets of the non-liquid
fund schemes clocked a growth by 16% while their exposure to money market
securities jumped higher by 55%.
Liquidity is usually the main consideration behind a short-term, or
long-term, debt fund being invested in money market securities but that does
not explain the a higher level of above 20% exposure to these securities.
"In addition to liquidity consideration, in the last couple of months
there has been a general rise in yield and fund managers have likely chosen
to reduce their longer-duration securities exposure and park it in money
market securities," said R. Sivakumar, head of fixed income at Axis Mutual
Fund.
The shift from longer-duration debt to debt with shorter maturities is
also evident from the fact that mutual fund schemes have also increased their
exposure to debt market securities with maturity terms between 90 days and
one year.
At the end of August, the investment in debt paper having 90-365 days
maturity was 2.03 trln rupees, or 21.1% of aggregate debt assets held by
funds other than liquid funds. This was higher than the exposure of 19.0% at
the end of the preceding month.
With funds other than liquid funds jacking up their money market exposure
in the last two months, preference for some certain types of money market
instruments has also increased.
In the combined holdings of liquid funds and other funds in money market
securities, the exposure to collateralised borrowing and lending obligations,
which are typically one-day instruments, has shot up by 76% to 808 bln rupees
as of August-end from 458 bln rupees at the end of June.
This meant that of aggregate money market investments by all funds, these
CBLO instruments, accounted for 14.9% at the end of August, up from just 9.8%
at the end of June.
The bulk of aggregate money market exposure of funds is in commercial
paper whose exposure has stayed consistent around the 49% level in the last
three months. End
http://www.cogencis.com/differentiators/ShareNews.aspx?newsId=1029705
MF debt exposure to money mkt & short term paper rises in Jul-Aug
Debt funds chose to maintain a high investment presence at
the lower end of the yield curve for the second consecutive month in August,
an analysis of the latest mutual fund deployment data from Securities and
Exchange Board of India released on Wednesday showed.
Investments by debt funds, gilt funds and balanced funds collectively
held 20.1% of their aggregate debt assets in money market securities at the
end of August. It followed a 22.8% exposure to money market securities as of
July-end and a 15.0% one as of end of June.
The analysis excluded liquid funds since they have to mandatorily stay
invested in money market securities having maturity less than three months.
Excluding the assets held by liquid funds, the total debt assets of
mutual fund schemes totalled 9.60 trln rupees as of August-end of which 1.93
trln rupees were invested in debt securities having maturity of less than 90
days, the data under review showed.
From June-end to August-end the aggregate debt assets of the non-liquid
fund schemes clocked a growth by 16% while their exposure to money market
securities jumped higher by 55%.
Liquidity is usually the main consideration behind a short-term, or
long-term, debt fund being invested in money market securities but that does
not explain the a higher level of above 20% exposure to these securities.
"In addition to liquidity consideration, in the last couple of months
there has been a general rise in yield and fund managers have likely chosen
to reduce their longer-duration securities exposure and park it in money
market securities," said R. Sivakumar, head of fixed income at Axis Mutual
Fund.
The shift from longer-duration debt to debt with shorter maturities is
also evident from the fact that mutual fund schemes have also increased their
exposure to debt market securities with maturity terms between 90 days and
one year.
At the end of August, the investment in debt paper having 90-365 days
maturity was 2.03 trln rupees, or 21.1% of aggregate debt assets held by
funds other than liquid funds. This was higher than the exposure of 19.0% at
the end of the preceding month.
With funds other than liquid funds jacking up their money market exposure
in the last two months, preference for some certain types of money market
instruments has also increased.
In the combined holdings of liquid funds and other funds in money market
securities, the exposure to collateralised borrowing and lending obligations,
which are typically one-day instruments, has shot up by 76% to 808 bln rupees
as of August-end from 458 bln rupees at the end of June.
This meant that of aggregate money market investments by all funds, these
CBLO instruments, accounted for 14.9% at the end of August, up from just 9.8%
at the end of June.
The bulk of aggregate money market exposure of funds is in commercial
paper whose exposure has stayed consistent around the 49% level in the last
three months. End
http://www.cogencis.com/differentiators/ShareNews.aspx?newsId=1029705
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