HNIs steer clear of illiquid investments after Covid-19 outbreak

Market-linked debentures and credit risk funds - two products to have grown popular in the past two years - have fallen out of favour since the outbreak

Wealthy investors are shunning illiquid investments in the present uncertain environment, where cash is king.

Market-linked debentures (MLDs) and credit risk funds — two products to have grown popular in the past two years — have fallen out of favour since the outbreak.  MLDs are close-ended structured products — debt or equity-linked — which come with a lock-in of 2-3 years. For equity-linked structures, the underlying can be an index such as the Nifty, or a basket of stocks. The pay-off for investors could be in the form of a fixed coupon or participation rate. Debt MLDs typically pay a