Safety First, Always! Friday, Sep 21, 2018
Today on 21 Sep 2018, equity markets had a turbulent session as the shares of housing finance companies came under sudden heavy selling pressure as interest rates on their debt spiked in the market. One of the reasons for this sell-off was actually linked to the recent financial stress in the Infrastructure Leasing & Financial Services (IL&FS) Group.
Recently, IL&FS and its subsidiaries were downgraded directly from the highest credit rating "AAA" to "Junk" which led to broad based nervousness about the credit profile of other private issuers especially NBFCs. Many investors including fund houses are now rushing to sell debt securities of various housing finance companies which are heavily relied on refinancing their debt. This led to a sharp rise in their market yield and thus a drop in prices.
In our debt schemes, Quantum Liquid Fund (QLF) and Quantum Dynamic Bond Fund (QDBF), we do not take any exposure in private sector corporations and invest only in government securities, treasury bills and highest quality instruments issued by Public Sector Undertakings (PSU) which are shortlisted under our proprietary credit research and review process.
Liquid funds are short term saving instruments designed to meet short term cash and contingency needs and are positioned as a substitute to savings bank accounts. The objective of a Liquid Fund is to keep the money Safe, Liquid and earn slightly higher returns than those offered by Savings bank Accounts.
Thus, liquid funds’ portfolios should have very high liquidity, minimum volatility and near zero chances of capital loss (credit risk – risk of default of interest and principal).
At Quantum, we always stress on the primary objective of the liquid funds and advice investors to prioritize safety and liquidity over returns while investing in liquid funds.
We disclose our portfolios of Quantum Liquid Fund and Quantum Dynamic Bond Fund on a weekly basis enhancing transparency. Investors are encouraged to visit the page and peruse the portfolios.
Therefore while the returns that the Quantum Liquid Funds may not be in line with others as the risk that the Quantum Liquid Fund takes is much lower. Hence today’s sell off of private sector instruments has minimal impact on the portfolios of the Quantum Liquid Fund and the Quantum Dynamic Bond Fund.
|Name of the Scheme||This product is suitable for investors who are seeking*||Riskometer|
|Quantum Dynamic Bond Fund|
(An Open Ended Dynamic Debt Scheme Investing Across Duration)
|• Regular income over short to medium term and capital appreciation |
• Investment in Debt / Money Market Instruments / Government Securities
Investors understand that their principal will be at Moderately Risk
|Quantum Liquid Fund|
(An Open Ended Liquid Scheme)
|• Income over the short term |
• Investments in debt / money market instruments
Investors understand that their principal will be at Low Risk
Disclaimer, Statutory Details & Risk Factors:
The views expressed here in this article are for general information and reading purpose only and do not con stitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are f air and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.
Mutual fund investments are subject to market risks read all scheme related documents carefully.
Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.