Policy responses to climate change can have important implications for monetary policy and vice versa. Different approaches to imposing a price on carbon will impact energy and other prices differently; some would provide stable and predictable price outcomes, and others could be more volatile. In "Climate change and monetary policy: Dealing with disruption" (PDF), Warwick…

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Tyson Foods on Monday reported that its fiscal second-quarter net income fell 15% from a year earlier, as production disruptions weighed on its results.

Are you experiencing depression, mood instability, and loneliness? Blame the disruption in your body's internal clock, researchers say.

Our 24-hour biological body clock governs the fundamental physiological and behavioural functions including from body temperature to eating habits in almost all organisms. Disruptions in that biological clock may arise from increased activity during rest periods and/or inactivity during the day. Disturbances to the body's internal clock or the circadian rhythms are also associated with lower happiness and health satisfaction, and worse cognitive function, according to a study published in The Lancet Psychiatry.

"Our findings indicate an association between altered daily circadian rhythms and mood disorders and well-being," said study author Laura Lyall, from the University of Glasgow.

"The study reinforces the idea that mood disorders are associated with disturbed circadian rhythms, and we provide evidence that altered rest-activity rhythms are also linked to worse subjective well-being and cognitive ability," Lyall added.

The study included data from 91,105 participants aged between 37-73. The researchers objectively measured the rest and activity rhythm patterns which is known as relative amplitude.

The results showed that lower relative amplitude was linked with greater odds of reporting lifetime history of major depression or bipolar disorder.

It was also associated with greater mood instability, higher neuroticism scores, more subjective loneliness, lower happiness and health satisfaction, and slower reaction time.

However, the researcher said that the findings showed observational associations rather than cause and effect, and "cannot tell us whether mood disorders and reduced well-being cause disturbed rest-activity patterns, or whether disturbed circadian rhythmicity makes people vulnerable to mood disorders and poorer well-being," Lyall said.

She also noted that rest-activity rhythms differ between younger and older adults which may cause difference in the daily clock and mental health link based on their age.

(Edited by mid-day online desk, with inputs from IANS)

Catch up on all the latest Mumbai news, crime news, current affairs, and also a complete guide on Mumbai from food to things to do and events across the city here. Also download the new mid-day Android and iOS apps to get latest updates

After an engineer in the G north ward tested positive for COVID-19, water supply to residents of Dadar-Mahim is likely to be disrupted for a while. The entire team in charge of repairing the water pipeline has been quarantined.

The engineers and workers of G north ward offices were on essential duty of ensuring water supply, but one of them tested positive for COVID-19 late Tuesday night.

"He was on duty of repairing the water pipeline in Dharavi. In all likelihood, that is how he contracted the virus," one of the employees said.

Soon after the engineer tested positive, the BMC health department quarantined the entire team on April 29, Wednesday, to avoid further transmission. The repair work will restart only after the team gets the all-clear, which will take a while.

Catch up on all the latest Mumbai news, crime news, current affairs, and a complete guide from food to things to do and events across Mumbai. Also download the new mid-day Android and iOS apps to get latest updates.

Mid-Day is now on Telegram. Click here to join our channel (@middayinfomedialtd) and stay updated with the latest news

COVID-19 has started showing its impact on the mutual fund industry. Few days ago I mentioned in my article, Debt mutual funds witnessed massive outflows of Rs 1.95 trillion in the month of March.

Though we could attribute most of that outflow to corporates redeeming funds to meet their quarter end obligations, high volatility and uncertainty as consequences of the pandemic could have also played a major hand in the redemption pressure for debt schemes.

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FII have been redeeming investments heavily in equity and debt segment ever since WHO declared COVID-19 a pandemic. In March, FIIs pulled out Rs 60,375 crore from the debt market.

High redemption and lack of buying interest has made debt mutual fund schemes vulnerable, especially those with higher exposure to low rated instruments.

This instability has claimed its first casualty in debt mutual funds...

Franklin Templeton Mutual Fund (FTMF) has decided to wind down six of its debt schemes with effect from April 23, 2020 due to COVID-19 related market dislocation. This is something that is unheard of in the mutual fund industry and has perplexed many investors and advisors.

The schemes that are wound up are:

• Franklin India Low Duration Fund
• Franklin India Dynamic Accrual Fund
• Franklin India Credit Risk Fund
• Franklin India Short Term Income Plan
• Franklin India Ultra Short Bond Fund
• Franklin India Income Opportunities Fund

Together these schemes have an AUM of 30,854 crore as on March 31, 2020. Notably, these are the very schemes which in the past had to create segregated portfolio for its exposure to downgraded papers of Vodafone Idea and Yes Bank.

What led to the move?

According to a statement to investors from FTMF, "Despite several measures taken by the Reserve Bank of India (RBI), the liquidity in certain segments of the corporate bond markets has fallen-off dramatically and has remained low for an extended period. In this scenario, mutual funds are facing unprecedented liquidity challenges due to a variety of factors-rising redemption pressures due to heightened risk aversion, mark to market losses following a spike in yields and lower trading volumes in the bond markets. These factors have together caused a significant and worsening liquidity crunch for open-end mutual fund schemes investing in corporate credits across the credit rating spectrum."

The schemes had to resort to continuous borrowing to fund redemptions during this time, and were unable to repay the borrowings through sale of portfolio securities due to the prevailing market environment. The Investment manager did not believe it was prudent to continue funding redemptions through potentially increasing levels of borrowings.

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FTMF follows a high-risk high-return strategy for the above mentioned funds - Meaning a major part of its portfolio is exposed to lower rated securities (rating below AAA). The market disruption due to the virus outbreak has impacted these securities the most.

Under conditions of high redemption pressure, mutual funds sell their liquid assets to meet the demand, leaving the portfolio highly exposed to illiquid assets.

Thus, investors who choose to stay invested are at a disadvantage here.

Anticipating continued liquidity stress to the funds, the fund house thought winding up the scheme is the only viable option for the unitholders to minimize erosion of value.

Table: Details of schemes being wound up

What does it mean for investors of these schemes?

Investors of these schemes will not be able to purchase/redeem investment, switch to other schemes or do systematic transactions. In short their funds will be locked. The fund will not charge any management fees for the funds that are being wound up.

The fund house will rely on coupon payments, maturity value of underlying securities, and selling of securities at realisable value. While the fund house expects to realise most of the proceeds as per maturities, there may be some low rated securities that may even default on the due date. The fund house may create segregated portfolios for such securities and pay back as and when the money is realised.

It will be prudent to check the average maturity of portfolios of each fund and expect major repayment within that period.

What should investors in debt funds do?

Debt mutual fund Investors are not as confident, due to incidents of exposure to toxic papers in the past. This event could make them even more wary about their investment in debt schemes. As a consequence, there may be some panic selling in other debt schemes by investors worried about their funds getting locked.

However, instead of taking any hasty decisions, it would be a great idea to check your funds for the quality of assets it holds.

Choose a fund house that follows prudent investment process and stringent risk-management system. In these uncertain times, it would be wise sticking to liquid funds and overnight funds for the fixed-income part of your portfolio. Alternatively, if you prefer safety of capital, invest in Bank fixed deposits.

Our friends at Quantum Mutual Fund have highlighted the secret behind their debt management strategy which has helped them provide safety and liquidity to investors when it comes to investing in quantum funds. Don't Worry, Quantum Liquid Fund always aims for Safety and Liquidity

The way ahead...

While the fund house has done this to protect investors' interest, it has made the funds illiquid from the investors' point of view. Many investors may lose faith in debt funds for their short-term goals.

Going further, investors may have to consider liquidity risk due to AMC action, while investing in any high credit risk oriented debt funds.

It is time for the regulator to step up and clarify the illiquidity part for other debt schemes out there to investors. Moreover, it needs to provide a framework of strict guidelines to restrict fund managers from putting investors' hard-earned money at risk by exposing them to low rated securities for higher yield.

Meanwhile, AMFI has assured investors that a majority of the fixed income fund assets is invested in superior credit quality securities, and the schemes have appropriate liquidity to ensure normal operations. It further stated that the industry remains fully committed to the investors' interests and there is no need for them to panic and redeem investments.

Author: Divya Grover

This article first appeared on PersonalFN here.

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PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.

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