UTI Mutual Fund announced the launch of the UTI Fixed Term Income Fund Series XXXVI - I (1574 Days), a close-ended income fund investing in constituents of the CRISIL Medium to Long Term Debt Index.
The scheme opened for public subscription on February 21, 2023, and will close on February 27, 2023.
Q. What kind of mutual fund schemes is this?
This is a kind of debt fund instrument that aims to generate returns that are commensurate with the performance of the CRISIL Medium to Long Term Debt Index. However, there is no assurance that the scheme’s investment objective will be realized.
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to earn returns by investing in a portfolio of fixed-income securities maturing on or before the date of maturity of the scheme. However, the scheme does not guarantee/indicate any return. There is no assurance that the scheme’s objective will be achieved. This close-ended debt scheme contains relatively high interest-rate risk and relatively low credit risk.
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 Re 1, thereafter. The scheme offers a Regular Plan and Direct Plan.
Both the plans offer following options:
- Growth option
- Payout of income distribution cum capital withdrawal option (Payout of IDCW option)
In case where no option is exercised by the applicant/unitholder at the time of making his investment or subsequently, he will be deemed to be under the Growth option and his application will be processed accordingly.
Under normal circumstances, the asset allocation under the schemes will be as below:
|Instruments||Indicative Allocation (% of total assets)||Risk Profile|
|Minimum||Maximum||Low to Medium|
|Debt Instruments||80%||100%||Low to Medium|
|Money Market Instruments||0%||20%|
|Source: Scheme Information Document|
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-year returns (in %)|
|HDFC FMP 1846D August 2013 (1) (27)||14.24|
|SBI Debt Fund Series C - 49||8.61|
|ICICI Prudential FMP - Series 85 - 10 Years Plan I||7.99|
|IDFC Fixed Term Plan - Series 179||7.97|
|SBI Fixed Maturity Plan (FMP) - Series 1||7.97|
|Nippon India Fixed Horizon Fund XLI - Series 8||7.92|
|IL&FS Infrastructure Debt Fund - Series 3 - B||6.42|
Q. How will the scheme benchmark its performance?
The performance of the scheme is measured against the CRISIL Medium to Long Term Debt Index. The scheme will invest in the constituents of the underlying index.
Q. How do investors seek redemption from the scheme?
No redemption is permitted before maturity. The scheme will come to an end on the maturity date. On maturity of the scheme, the outstanding units shall either be redeemed and proceeds will be paid to the unitholder or will be switched out to any existing open-ended scheme/a fixed term income fund of UTI Mutual Fund open for sale on the date of maturity in the respective options, as opted by the unitholder, as the case may be.
If the investor does not select any of the aforesaid options, then the units of the scheme will be compulsorily and without any further action by the unitholder(s) redeemed on the maturity date/final redemption date. On the maturity date/final redemption date of the scheme, the units under the scheme will be redeemed at the applicable NAV. For redemptions made on the maturity date/final redemption date, the asset management company will not charge any exit load.
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?
Sunil Patil 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 in doubt about whether the product is suitable for them.