Investment Objective :
The fund is positioned in the short-term space Controlled risk within 3 years by maintaining duration About the Fund. The fund is positioned to benefit from its core allocation in short term corporate bonds i.e. in the 2-3-year space while monitoring risk by controlling the overall portfolio duration.
The focus of the fund is to capture the compression in the 3 years corporate bonds and also have a higher accrual. By generating regular income and capital appreciation. To generate income by investing in arbitrage opportunities in the cash and derivatives segment of the equity market, and capital appreciation through a moderate exposure in equity
Also known as Medium duration mutual funds as the name suggest invests in instruments for a medium time-frame. While the term medium duration is relative and will differ from one investment instrument to another, it is considered to fall anywhere between 3-4 years. SEBI has mandated that medium duration schemes are required to invest in debt and money market instruments such that the Macaulay duration of the portfolio will be anywhere between three to four years.
This type of medium duration mutual funds are designed to offer an investment opportunity that can help investors meet specific investment goals. These funds are designed to help investors meet 3-4 years goals which might be difficult to achieve with long-term or short-term mutual funds. For e.g., If someone wanted to purchase a car in the next three years, would serve as an investment tool to save the required funds.
These funds allow investors to balance the portfolio and add stability to it. The best medium duration funds are suitable for stable returns since these funds invest in debt and money market instruments and delivered returns in the range of 9-11%.
Medium duration funds in India invest more than 65% of the corpus in debt and money market instruments. Hence, these funds are treated as debt mutual funds for the purpose of taxations. So, if the funds are held for a period of less than 36 months, a short-term capital gain tax as per the income tax slab of the investor will be applicable.