Mutual Funds With Illiquid Assets Pose Risk to Financial System

The financial system is at danger from open-ended mutual funds that give exposure to illiquid assets, according to the International Monetary Fund

The IMF stated that the less regularly traded segments of the $41 trillion

global open-ended business had a "significant potential vulnerability," particularly in choppy markets, in a blog post headlined How Illiquid Open-Ended Funds Can Amplify Shocks and Destabilize Asset Prices.

Investors can sell their shares every day at a price fixed at the conclusion of each trading session, but the global organisation warned that fund managers in sectors including corporate bonds

As a result, there is a liquidity mismatch since the price does not accurately represent the trading expenses related to the transaction.

 some developing markets, and real estate could take several days to transfer their assets.

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Leaving for the US to attend G-20 and IMF meetings is the finance minister