From today, 22 May 22, 2020, Aditya Birla Sun Life Mutual Fund is going to stop accepting fresh money, and switch-in application in two of its debt schemes. One is the Medium Term Fund and the second one is the Credit Risk Fund. This is done temporarily from May 22, The fund house says the move is aimed at benefitting the existing investor in these two schemes. Redemptions from these funds though will be allowed as it was earlier.

A Balasubramanian, CEO of Aditya Birla Sun Life MF, says, “we believe there is a substantial gain in these two funds which would be realized by the existing investors over the next few months. Since we do not wish to dilute this for existing investors by taking more money in these funds, we have stopped fresh subscriptions in these funds.”

Prior commitments though will be accepted, all investments through systematic investment and transfer plans, and century SIPs registered before May 22, 2020, will be accepted. Investors cannot enroll in any fresh systematic investment transactions in these two ABSL funds.

ABMTP’s assets under management fell to Rs 2400 crore as on April 30, 2020, from Rs 3957 crore as on March 31, 2020. ACRF’s AUM declined to Rs 2576 crore from Rs 4644 crore over the same period. After Franklin Templeton shut six credit risk-oriented funds, investors panicked and started redeeming. according to data released by the Association of Mutual Funds in India, In April 2020, credit risk funds as a category saw net outflows of Rs 19238 crore, whereas medium-term bond funds saw a net outflow of Rs 6363 crore.

The decision to stop fresh inflows is taken because the fund house wants the existing investor to get more profit after the lockdown gets over. After the lockdown, the fund house could recover money from marked-down assets.

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