Debt mutual funds have got significant bad press in the past few months. With several corporate groups defaulting, and constant downgrading of many companies’ debt papers, it would seem the end of the world for debt mutual funds.
The popularity of debt funds is evident from data from the Association of Mutual Funds in India (AMFI). As on March 31, 2019, the total exposure to debt papers by debt-oriented mutual funds (non-gilt and non-liquid) is around Rs 7.21 trillion. Retail investors hold a nominal 10 per cent, but in terms of folios the number is around 8.6 million, which is significant.
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