UTI MF plans to create segregated portfolio after rating downgrade of Altico Capital

UTI Mutual Fund Friday said it plans to create a separate portfolio -- UTI Credit Risk Fund -- segregated from its main holding, following the downgrade of debt instruments of Altico Capital India, a lender to real estate companies.

However, the decision is subject to the approval from Board of Trustees, UTI Mutual Fund said in a statement.

The move will help prevent the distressed assets from damaging the returns generated from more liquid and better-performing assets.

"Pursuant to downgrade of debt instruments of Altico Capital India Ltd to 'B' i.e. 'below investment grade' by CARE Ratings Ltd, UTI Mutual Fund proposes to create segregated portfolio in respect of Altico Capital India Ltd in UTI Credit Risk Fund effective from September 13, 2019 subject to approval from Board of Trustees," the fund house said.

Till Thursday, UTI Credit Risk Fund has an exposure of Rs 201.82 crore, amounting to 5.85 per cent of assets under management, in debt security of Altico Capital.

Upon recovery