Principal Mutual Fund has temporarily suspended all subscriptions and additional switch-ins under Principal Cash Management Fund, Principal Ultra Short Term Fund, Principal Low Duration Fund and Principal Arbitrage Fund, the fund house said in an addendum.
The fund house also notified that the processing of registrations under systematic investment plans and other 'pre-registered' investments in the above-mentioned schemes will remain suspended to 'protect the interest of the unit-holders'.
Generally, a fund house prefers to stop fresh inflows when there is a perceived dearth of investment opportunities. Instead, the fund may choose to sit on the cash till the market opens up for sound investments.
Also, the fund manager may not always be in a position to wait it out and avoid investing altogether. In such cases, restricting inflows in the scheme is the only way out.
All other features of the schemes will remain unchanged.
