Aditya Birla Sun Life Mutual Fund launched the Aditya Birla Sun Life Fixed Term Plan - Series UB (1224 days) on December 07, 2022.
The new fund offer (NFO) lays bare the benefits of investing in a closed-ended scheme in the “Income” scheme category. Initially available for subscription only for a day, i.e., December 08, 2022, the fund house extended the NFO closing date to December 15, 2022.
This fund charges nothing in terms of both entry and exit loads. Since this is a closed-ended scheme, the asset management disallows redemption/repurchase of units before the scheme matures. However, investors looking to exit may do so through the stock exchange mode.
The minimum subscription amount has been limited to ₹1000 post which one may invest in multiples of ₹10. Mohit Sharma would be managing this fund. Investment through a systematic investment plan (SIP) is not allowed, thus, mandating a lump sum investment approach. The fund will track the CRISIL Medium Term Debt Index.
The objective of investing in this scheme is to generate income by investing in a portfolio of fixed-income securities maturing on or before the tenure of the scheme. Considering that the fund house does not guarantee any returns on this fund, investors will know only on maturity if the returns from this fund align with their financial goals.
This fund is best suited for conservative investors looking to escape the market volatility and, thereby, allocate a part of their earnings either in debt or shift some of their equity funds’ returns to debt instruments.
This way, they can be relieved of continuously falling stock prices and consequently lower mutual fund performance and avail of the stability and fixed nature of fixed-income plans like these. Believe it or not, investing in debt funds can also help gain financial independence in the long run.