Mumbai: Aditya Birla Sun Life Mutual Fund has temporarily suspended fresh inflows into two of its credit risk and medium term funds from Friday, the fund house said in a notice on Thursday.
The two schemes are Aditya Birla Sun Life Medium Term Plan (ABMTP) and Aditya Birla Sun Life Credit Risk Fund (ACRF). Redemptions from these funds, though, will be allowed, as usual.
Fresh systematic investment plans (SIPs) and systematic transfer plans (STPs) will not be registered in the two schemes, but the existing SIPs and STPs can continue.
A spokesperson for the fund house confirmed the suspension of fresh inflows was to ensure the gains from recovery of written off debt accrues only to the existing unit holders. The fund house had exposure to IL&FS papers earlier, which has since been written off.
“We believe that there are substantial gains in our funds which would be realised by the existing investors over next few months,” said A Balasubramanian, MD & CEO, Aditya Birla Sun Life Mutual Fund.
“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,” he added.
Debt funds have been dealing with tough times, and Franklin Templeton shut down six of its schemes last month.
Aditya Birla’s Credit Risk Fund has an AUM of Rs 2,200 crore and the Medium Term Plan Rs 4,200 crore. Due to multiple write-downs, Medium Term and Credit Risk schemes of Aditya Birla Mutual Fund have one-year returns of 0.59 per cent and -8.48 per cent.