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PGIM India Mutual Fund starts daily disclosure of short maturity debt portfolios

Livemint, Jun 3, 2020

Dir

Neil Borate

• Schemes that will make daily disclosures are PGIM Overnight, PGIM Insta cash, PGIM Money Market and PGIM Ultra Short Term Fund

Breaking fresh ground in an industry where monthly portfolio disclosure is the norm, PGIM India Mutual Fund has started daily disclosure of its short-term portfolios. The schemes covered by this initiative are PGIM Overnight, PGIM Insta cash, PGIM Money Market and PGIM Ultra Short Term Fund.

In a phone conversation with Mint, Ajit Menon, CEO, PGIM India MF, also stated the fund house’s intention to disclose other debt portfolios on a weekly basis.

If this practice gathers steam in the industry, it could go some way towards restoring confidence in debt mutual funds.

“Mutual Funds have faced a challenging time over the past 2 years since the IL&FS crisis and particularly in the past two months. Hence, we have taken this initiative to improve transparency on the debt side. In our view, more transparency will bring trust. We are also considering weekly disclosures for other debt categories,” said Menon.

In its earlier avatar of DHFL Pramerica Mutual Fund, the fund house had faced significant value erosion due to defaults from DHFL, its part owner. However DHFL sold its stake to Prudential Global Investment Management, its joint venture partner in late 2018, with approvals and regulatory clearances for the sale coming through in early 2019.

“I think this is a confidence-building step for investors, particularly in short maturity funds where the investment horizon can be of a few weeks or months. Monthly disclosures for very short horizons may not be as useful,” said Prateek Pant, co-founder and head, products and solutions, Sanctum Wealth Management.

Investors in debt funds should look at daily portfolios, where disclosed, for very short horizons.