The Securities and Exchange Board of India (SEBI) has revised the valuation of debt securities hold by mutual funds. All money market and debt securities having residual maturity up to 91 days shall be valued at weighted average price at which they are traded on the particular valuation day and securities which are not traded on a particular valuation day, shall be valued on amortization basis. Securities with residual maturity above 91 days and are not traded on a valuation day shall be valued at benchmark yield/ matrix of spread over risk free benchmark yield obtained from agencies. The revision would affect the short term bond funds most. The revision will be effective from 1st July, 2010.
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