Aditya Birla Sun Life Mutual Fund has launched a fixed term plan -series TW recently. The plan has a 167-day tenure. It seeks to generate income by investing in a portfolio of fixed income securities maturing on or before the tenure of the scheme.
It is a close-ended scheme that opened on August 29, and will close on September 6, 2022.
The investors who want to subscribe to this scheme must invest a minimum of ₹1,000 and in multiples of ₹10. The scheme's benchmark is Crisil Ultra Short Term Debt Index. The fund will be managed by Mohit Sharma.
It is important to mention here that when it comes to debt funds, investors can choose between target maturity funds or fixed maturity plans. Click here to know the distinction between these two categories.
Details of the scheme
Now coming back to ABSL’s fixed term plan, the scheme offers both ‘regular’ and ‘direct’ plan with a common portfolio and separate NAVs (net asset value). The investors are supposed to indicate the plan i.e., either regular or direct for which the subscription is made by indicating the choice in the application form.
As far as asset allocation is concerned, the portfolio will comprise debt securities including government securities, state development loans and money market instruments. The risk profile of these constituent securities will be from low to moderate.
The intended portfolio allocation will be 20-25 percent of certificates of deposit (CDs) of A1+ credit rating and 65-70 percent of commercial papers (CPs) of A1+ category. There will also be 0-5 percent of non-convertible debentures (NCDs) of AAA credit rating.
And in case of non-availability of CPs/ NCDs, the fund scheme may also invest in bank CDs having highest ratings or treasury bills.
The AMC also clarifies that the asset allocation may change from time to time keeping in view market conditions, opportunities available in the market, current regulations and political and economic factors, among others.
The fund manager's investment philosophy is to generate risk-adjusted returns through a research driven investment approach by investing in a portfolio of fixed income securities maturing on or before the tenure of the scheme.
The investment manager will aim to allocate assets of the scheme between various money market and fixed income securities.