IDFC Mutual Fund announced the launch of the IDFC Fixed Term Plan - Series 199 (2233 Days), a closed-ended income fund investing in the CRISIL Medium to Long Duration Fund AIII Index constituents. The scheme opened for public subscription on February 28, 2023, and will close on March 08, 2023. The NFO will not be kept open for more than 15 days.
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 to Long Duration Fund AIII index. However, there is no assurance that the scheme’s investment objective will be realized. This is a relatively high interest rate risk and relatively 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 debt and money market instruments maturing on or before the maturity of the scheme. There can be no assurance or guarantee that the scheme’s investment objective 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 ₹5,000 and in multiples of ₹10, thereafter. The scheme will have regular and direct plans with a common portfolio and separate NAVs.
Under normal circumstances, the asset allocation (% of Net Assets) of the scheme's portfolio will be as follows:
| Instruments | Indicative Allocation (% of Total assets) | Risk Profile | |
| Maximum | Minimum | ||
| Money market instruments (including Tri-party Repo) | 20 | 0 | Low to moderate |
| Debt securities | 100 | 80 | Moderately High |
Investment in securitised debt - up to 40% of total assets.
The scheme shall not engage in securities lending and short selling. The scheme will not invest in foreign securities, derivatives instruments and debt instruments having Structured Obligations/Credit Enhancements as specified in SEBI circular SEBI/HO/IMD/DF2/CIR/P/2019/104 dated October 01, 2019.
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 |
| Source: MoneyControl | |
Q. How will the scheme benchmark its performance?
The scheme’s benchmark index would be the CRISIL Medium to Long Duration Fund AIII Index. The trustees may change the benchmark in future if a benchmark better suited to the investment objective of the scheme is available, provided any change in benchmark will be subject to regulatory approval of SEBI.
Q. How do investors seek redemption from the scheme?
No redemption/repurchase of units shall be allowed prior to the maturity of the scheme. Unitholders who wish to exit may do so through the stock exchange mode.
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”.
Q. Who will manage this scheme?
Gautam Kaul is the fund manager for the scheme.
Q. Does the fund contain any inherent risk?
The scheme involves “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 moderate risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
