Invesco India Mutual Fund in the news: What should you do?

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Invesco India

Invesco India Mutual Fund, with an average asset base of over INR 40,159 crores (for the quarter ending June 2022), is among the very well-known global mutual fund companies operating in India. The company has USD 1.5 trillion in assets under management around the globe and is listed on the stock exchanges of the NYSE and S&P 500.

Latest about Invesco Mutual Fund

As per the latest investigation by one of the leading business news-daily, the prominent mutual fund is facing issues with regard to the attrition of its fund management team. The ongoing whistleblower allegations of misappropriation in debt schemes, and the many fund management team members moving out are the two major issues that the Invesco mutual fund is facing right now.

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Invesco news: What are the issues?

As per the media reports in May-June 2022, the Market regulator, SEBI, had found violations of norms of inter-scheme transfers (ISTs) in some debt mutual funds. Allegations that Invesco mutual fund executed many inter-scheme transfers (ISTs) between 2016 and 2021 and transferred high-risk to retail-oriented schemes have created a lot of doubts in the minds of investors.

Invesco mutual fund: Resignations in focus!

As per the latest media report, there have been many changes in the fund management teams in the recent past in many Invesco mutual fund schemes. The resignations of the Fixed Income head, Fund Manager, and Credit Analyst as well as some key personnel managing investments for certain debt funds could have been the key drivers of such a report.

Legal case on Invesco mutual fund?

As per the media reports, the whistleblower's allegation of unlawful termination has led to the summoning of the senior officials of Invesco to the court.

Invesco mutual fund in news over inter-scheme transfers of papers?

In 2020, The Securities and Exchange Board of India (SEBI) tightened the regulations around inter-scheme transfers (ISTs) in mutual fund schemes. As per the rule, such inter-scheme transfers for managing liquidity should only be used as the last resort - post utilizing all the usual strategies such as using cash, market borrowing, and selling securities in the market.

As per media reports, the Invesco mutual fund's domestic mutual fund team executed trades on behalf of offshore funds (focusing on Indian debt). This could have violated SEBI's mutual fund regulations.

The reports claim that Invesco mutual fund moved low credit rating bonds of issuers such as Sintex, Business Broadcast Networks (BBNL),  and IL&FS Transport, etc. from one of the short-duration mutual funds to one of its credit risk funds.

Invesco fiasco: What should investors do? 

Invesco India is yet to respond to these allegations. Analysts have advised a wait-and-watch approach before deciding to exit their holdings in Invesco India Funds.