UTI Credit Risk Fund's NAV jumps 8.44% in a day

The net asset value (NAV) of UTI Credit Risk fund, a debt oriented scheme rose by 8.44% on Sep 22 as the fund house valued its existing DHFL bonds at Rs 20.5. Earlier when the rating of DHFL was downgraded to D, the fund house had marked down the security to zero.

“With the ongoing developments in the resolution process of DHFL, the valuation of existing DHFL bonds was reviewed and revised upward by UTI MF in line with the weighted average price given by valuation agencies to Rs. 20.50per face value of Rs 100,” said a spokesperson for UTI MF. The fund holds bonds worth Rs 195 crore in DHFL. As per industry sources, if the NCLT resolution goes through in the case of DHFL the fund house could get 42% of the money back.

On September 17, the fund house had increased exit load in the scheme to 5% if investors exited before a year , to prevent new investors from taking advantage of money coming back to the scheme.

As per SEBI categorization rules, credit risk funds are supposed to invest atleast 65% of their corpus in less than AAA instruments. The scheme has assets under management of Rs 411 crore as of August 31, 2021.


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