As the markets are undergoing a phase of massive correction, some investors are contemplating investing in the fixed income plans. Asset management companies also appear to be prompt in rolling out plans that align with investors’ needs.
Recently two fund houses — Aditya Birla Sun Life and HDFC — launched new fund offers (NFOs) of fixed maturity plans:
Aditya Birla Sun Life plan
Aditya Birla Sun Life launched fixed term plan -Series TU (1789 days). The new fund offer was launched on July 18 and will close on July 27.
The minimum subscription amount is ₹1,000 and in the multiples of ₹10. The minimum subscription amount is ₹20 crore during the NFO period.
The scheme’s objective is to generate income by investing in a portfolio of fixed income securities maturing on or before the tenure of the scheme. The scheme does not guarantee/indicate any returns. There can be no assurance or guarantee that the investment objective of the scheme will be achieved.
The fund house will invest anywhere between 70 to 100 percent in debt securities including govt securities and state development loans (SDLs) excluding money market instruments and the remaining 0-30 percent in money market instruments.
HDFC FMP 1158D July 2022
HDFC launched a fixed maturity plan on July 19. The fund offer will remain open till July 25. The minimum subscription is ₹5,000 and there will be no exit load.
The scheme’s investment objective is to generate income through investments in debt / money market instruments and government securities maturing on or before the maturity date of the respective plan(s).
However, the asset management company makes it clear that there is no assurance that the investment objective of the scheme will be realised.
The plans having tenure above 36 months to 132 months will allocate anywhere between 80 to 100 percent to debt instruments and government securities. At the same time, the scheme will allocate a maximum of 20 percent and minimum of zero percent to the money market instruments.
For the plans with shorter tenure i.e., 401 days to 36 months, the ratio will be in the range of 70:30 to 100:0.
The scheme will invest in debt instruments of central, state and local governments, government agencies, statutory bodies, corporate entities, securitises debt, non-convertible redeemable preference shares, commercial papers, commercial bills, treasury bills, government securities having an unexpired maturity up to one year, tri-party repos on government securities or treasury bills, certificate of deposits, among others.
