ICICI Prudential Mutual Fund announced the launch of the ICICI Prudential Fixed Maturity Plan - Series 88 - 1303 Days Plan S, a closed-ended income fund investing in the CRISIL Medium Term Debt Index constituents. The scheme opened for public subscription on February 27, 2023, and will close on March 06, 2023.
Q. What kind of mutual fund scheme is this?
This kind of debt scheme aims to generate returns commensurate with the performance of the CRISIL Medium Term Debt Index. However, there is no assurance that the scheme’s investment objective will be realized. This is a relatively low-interest rate risk and low credit risk scheme.
Q. What is the main objective of investing in this fund?
The scheme seeks to generate income by investing in a portfolio of fixed-income securities/debt instruments maturing on or before the maturity of the scheme. This scheme is suitable for investors who are seeking a savings solution having a duration of 1303 days. There can be no assurance or guarantee that the investment objective of the scheme will be achieved.
Q. How may one invest in this fund?
The scheme offers units of Rs. 10 each. Investors can invest under the scheme with a minimum investment of ₹5000 and in multiples of ₹10 thereafter. The scheme will have a Regular Plan and Direct Plan with a common portfolio and separate NAVs.
Each of the above Regular and Direct Plans under the scheme will have the following options/sub-options:
- Growth Option;
- Income Distribution cum capital withdrawal option (IDCW) with Payout of Income Distribution cum capital withdrawal (IDCW Payout) sub-option and Transfer of Income Distribution cum capital withdrawal facility.
Under normal circumstances, the asset allocation (% of Net Assets) of the Scheme's portfolio will be as follows:
|Instruments||Indicative allocations (% of total assets)||Risk Profile|
|Debt Securities including Government securities||100||80||Low to medium|
|Money Market Instruments||20||0||Low to medium|
Q. Are there similar mutual funds in the market?
Many asset management companies have launched such funds in the past. Some of them include:
|Name of the fund|
Three-month returns (in %)
|UTI Ultra Short-Term Fund||3.04|
|WhiteOak Capital Ultra Short-Term Fund||2.68|
|Baroda BNP Paribas Ultra Short Duration Fund||1.71|
|ICICI Prudential Ultra Short-Term Fund||1.71|
|DSP Ultra Short Fund||1.70|
|Tata Ultra Short-Term Fund||1.67|
|HSBC Ultra Short Duration Fund||1.66|
|Bank of India Ultra Short Duration Fund||1.65|
|Canara Robeco Ultra Short-Term Fund||1.59|
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked to the performance of the CRISIL Medium Term Debt Index. The trustees reserve the right to change the benchmark in future if a benchmark better suited to the investment objective of the scheme is available.
Q. Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” is also “Zero”. Since the scheme will be listed on the stock exchange, exit load will not be applicable. Investors shall note that the brokerage on sales of the units of the Schemes on the stock exchanges shall be borne by the investors.
Q. Who will manage this scheme?
The investments under the scheme will be managed by Anuj Tagra and Darshil Dedhia.
Q. Does the fund contain any inherent risk?
The scheme involves “Low to Moderate Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be at low to moderate risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.