UTI Mutual Fund is launching NFO under its “debt category”, named UTI Long Duration Fund. This open-ended debt which will invest in debt and money market instruments while maintaining an optimum balance of yield, safety and liquidity.
Investment strategy: The scheme aims to identify securities with optimal risk return balance. An appropriate mix of debt market securities and money market securities will be used to achieve this. The scheme will invest in Debt & Money Market Instruments such that the Macaulay duration of the portfolio is greater than 7 years.
Macaulay duration: Macaulay duration is the weighted average of the time to receive the cash flows from a bond. It is measured in units of years. Macaulay duration tells the weighted average time that a bond needs to be held so that the total present value of the cash flows received is equal to the current market price paid for the bond. It is often used in bond immunization strategies.
Asset allocation: UTI Long Duration Fund will hold an allocation of 0% to 100% of its assets in Debt Instruments & Money Market Instruments with low to medium risk profile. These instruments with relatively high interest rate risk and relatively low credit risk and Macaulay duration of the portfolio will be maintained at greater than 7 years. Investment in securitized debts shall not exceed 40% of the net assets of the Scheme
Who should invest?
Investors with moderate risk appetite seeking regular income, in the long run should invest in the fund. Investors can gain from indexation benefits and limited incidence of taxation at the time of withdrawal, as there is no application of entry or exit load, supporting emergency withdrawals.
Risk associated: Moderate level of risk.
Benchmark: CRISIL Long Duration Fund AIII Index
Fund Managers: Mr. Sunil Patil and Mr. Deepesh Agarwal
The NFO is available for subscription from March 06 to March 15. The schemes will reopen for continuous sale and repurchase within five Business Days from the date of allotment. The fund offers systematic investment solutions like SIP and SWP to create a flexible investment plan. The minimum subscription amount is Rs 5,000/- and in multiples of any amount thereafter.
It offers Regular Plan and Direct Plan. Each plan offers Growth and Income options. Click here to invest in UTI Long Duration Fund.
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