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Aditya Birla Sun Life suspends fresh investments in two debt schemes; redemptions allowed

No fresh investments in these schemes will be allowed by instalments falling due under SIPs, CSIP or STPs registered before May 22 will be processed as usual

Aditya Birla Sun Life suspends fresh investments in two debt schemes; redemptions allowed

Aditya Birla Sun Life Mutual Fund has temporarily suspended fresh subscription or switch-in applications for two if its debt schemes. This suspension of fresh inflow will come into effect from May 22, 2020. The move is intended to protect the interest of investors, the fund house said in a notice.

These two schemes are Aditya Birla Sun Life Medium Term Plan, an open-ended medium term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 3-4 years, and Aditya Birla Sun Life Credit Risk Fund, which is an open ended debt scheme predominantly investing in AA and below rated corporate bonds, the fund house informed in a notice on Thursday. Redemptions under these schemes will be allowed as usual.

"No fresh registrations under systematic transactions viz., Systematic Investment Plan (SIP), Century SIP (CSIP) and Systematic Transfer Plan (STP) will be accepted for the effective date till further notice. However, for instalments falling due under SIP/CSIP/STP registered prior to the effective date will continue to be processed under the respective plans/options of the schemes," the fund house stated in its notice.

All other features and terms and conditions of the schemes will remain unchanged, it further added.

"We believe there are substantial gains in our funds which would be realised by the existing investors over 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," said A Balasubramanian, MD & CEO, Aditya Birla Sun Life Mutual Fund.

Debt funds have been in a tough spot since Franklin Templeton closed six of its schemes last month.

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