Clarification on Recent Portfolio Dip Witnessed In Some Mutual Funds
Mutual Fund users who transacted during Feb 11 & Feb 12 may have noticed a dip in their mutual fund portfolio on the subsequent weekend i.e on Feb 13 & 14.
This was a temporary user interface issue and had no connection to holdings in the portfolio. Here is a short note on what caused the issue and its resolution.
We at Paytm Money use a time-series database to store a user’s portfolio data. For some funds, the data entry was missing on the weekend that followed Feb 11 & Feb 12th, 2021.
All that users financials including portfolios are managed by the AMC or Asset Management Company associated with the mutual fund. Paytm Money merely acts as an intermediary and receives updates of the portfolio through reverse feeds. We get reverse data feeds from some AMCs on Monday for any transactions that are done on Thursday or Friday.
In this particular case i.e., for the transactions done on Feb 11th & Feb 12th, the reverse feed was received on Tuesday, Feb 16 instead of Monday and the code did not update data in our database on the weekend for certain users with transactions on Thursday or Friday.
Paytm Money, as an intermediary, has no access to investments made by its users. Mutual Fund House has access and hence there is no risk to the user’s assets. This was a technical issue with updating the portfolio data that we receive from the AMC that reflected temporarily in the user interface.
We detected the issue immediately and deployed a fix the next day on Wed, Feb 17, 2021.
In the whole process of Mutual Fund transactions, Paytm Money doesn’t hold the user’s money. On the T-day (transaction day) it lies with PG (Payment Gateway) and on T+1 (a day after the transaction is executed) it lies with AMC. Upon confirmation of allocated units, Paytm Money shows portfolio data.
Paytm Money is able to calculate the portfolio since it captures the meta information of the transaction and the confirmation of the allocated units. The portfolio dip was due to a glitch in the internal calculation in the Paytm Money ecosystem and had no impact on the user’s actual financials.