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15h agoLAMF Gone Wrong: Investor Loses 40% in Market Fall
In January 2024, Priya pledged her ₹10 lakh equity mutual fund portfolio to borrow ₹5 lakh through a Loan Against Mutual Funds (LAMF). When markets fell 25% by March, her portfolio’s NAV dropped to ₹7.5 lakh, triggering margin calls. Unable to provide extra collateral, her holdings were liquidated at low valuations. She lost ₹2.5 lakh in notional value and paid roughly ₹50,000 in interest and penalties. The case underscores why borrowers should maintain buffers and avoid leveraging during volatile market cycles.
negative
15h agoLAMF Gone Wrong: Investor Loses 40% in Market Fall
In January 2024, Priya pledged her ₹10 lakh equity mutual fund portfolio to borrow ₹5 lakh through a Loan Against Mutual Funds (LAMF). When markets fell 25% by March, her portfolio’s NAV dropped to ₹7.5 lakh, triggering margin calls. Unable to provide extra collateral, her holdings were liquidated at low valuations. She lost ₹2.5 lakh in notional value and paid roughly ₹50,000 in interest and penalties. The case underscores why borrowers should maintain buffers and avoid leveraging during volatile market cycles.
negative
LAMF Gone Wrong: Investor Loses 40% in Market Fall
about 15 hours ago
1 min read
81 words
An investor’s equity-backed LAMF turned costly after a 25% market fall caused forced liquidation, highlighting the risks of margin calls and leverage in downturns.
In January 2024, Priya pledged her ₹10 lakh equity mutual fund portfolio to borrow ₹5 lakh through a Loan Against Mutual Funds (LAMF). When markets fell 25% by March, her portfolio’s NAV dropped to ₹7.5 lakh, triggering margin calls. Unable to provide extra collateral, her holdings were liquidated at low valuations. She lost ₹2.5 lakh in notional value and paid roughly ₹50,000 in interest and penalties. The case underscores why borrowers should maintain buffers and avoid leveraging during volatile market cycles.
In January 2024, Priya pledged her ₹10 lakh equity mutual fund portfolio to borrow ₹5 lakh through a Loan Against Mutual Funds (LAMF). When markets fell 25% by March, her portfolio’s NAV dropped to ₹7.5 lakh, triggering margin calls. Unable to provide extra collateral, her holdings were liquidated at low valuations. She lost ₹2.5 lakh in notional value and paid roughly ₹50,000 in interest and penalties. The case underscores why borrowers should maintain buffers and avoid leveraging during volatile market cycles.
Tags:
mutual_funds
LAMF
mutual_funds
LAMF
market risk
margin call
investment lessons
Source:
Oct 23, 2025 • 13:40 IST