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Wealthy investors shun illiquid investments amid covid-19 outbreak

Market linked debentures and credit risk funds -- two products that had grown popular in the past two years --- have fallen off the map post the covid-19 pandemic

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Most of the issuers are NBFCs rated ‘AA’ or below, and carry a high risk of default

Ashley Coutinho Mumbai
Wealthy investors are shunning illiquid investments in an uncertain economic environment where cash and liquidity are king. 

Market linked debentures (MLDs) and credit risk funds -- two products that had grown popular in the past two years --- have fallen off the map post the covid-19 pandemic.  

MLDs are close-ended structured products, debt or equity-linked, that come with a two to three year lock-in. For equity-linked structures, the underlying can be an index such as Nifty 50 or a basket of stocks. The payoff for investors can be in the form of a fixed coupon or participation rate. Debt MLDs

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