Is it true that HSBC Mutual Fund has also now taken hits on some of the junk debt holdings?

HSBC Mutual Fund has written off its exposure to the troubled Dewan Housing. The write-offs were in two debt schemes; HSBC Short Duration Fund and HSBC Low Duration Fund. This is a continuation of the practice of fund houses taking exposure in low rated bonds in their short duration funds. The assets under management of these two schemes stood at Rs.325 crore and Rs.128 crore, respectively. However, the AUM has declined substantially by over 40% post March 31. HSBC Mutual Fund took a haircut of nearly 75% after two non-convertible debentures of DHFL defaulted in August and September 2019. However, post the COVID-19 pandemic and the national lockdown, DHFL’s resolution process has been delayed further. Since the view was that recovery of money in the foreseeable future was difficult, the MF decided to further mark down the matured DHFL NCDs from 75% to 100%. Close to 10% of the AUM of the debt funds has been wiped out by this write down.