UTI Mutual Fund had launched a new income fund called 'UTI Credit Opportunities Fund'. The investment objective of the scheme is to generate income & capital appreciation by investing in debt & money market instruments across different maturities and credit ratings. It is an open ended income scheme with no assured returns.
The NFO (new fund offer) is currently open for subcription and will close on November 8, 2012. The scheme will re-open for purchase and redemption from November 26, 2008.
Diversified Portfolio.!
The fund would look at investing in debt instruments of varying credit rating with the intent of maximizing yields and at the same time ensuring reasonable liquidity.
The scheme would invest in a reasonably diversified portfolio comprising debt instruments, securitised debt etc to capitalize on investment opportunities in debt segment which are currently mispriced and which in the view of the fund manager has a potential for some rectification.
CRISIL Composite Bond Fund Index will be the Benchmark Index for the scheme.
Entry Load: Nil
Exit Load: 365 days at 1.25%.
365 days and or = 548 days at 0.75%
greater than 548 days will be nil.
Why invest?
Since interest rates are at the peak, a fall in interest rates, could offer you a chance for capital appreciation.
Why not to invest?:
The scheme has an exit load of 0.75 per cent if you exit before 548 days, which is on the higher side.
Mr. Amandeep Chopra, Head- Fixed Income and Fund Manager of the scheme said, “Uncertain times call for smart investment strategies. This uncertainty has brought with it a set of opportunities like capitalisation on changing market conditions like change in credit outlook of company / sector and upgrade / downgrade revision of rating of securities. UTI Credit Opportunities Fund endeavours to identify and capitalize on these opportunities by investing in securities across the credit spectrum. UTI’s in-house research team will help in identifying these opportunities in the fixed income markets.”
Mr. Amandeep Chopra also said, “UTI Credit Opportunities Fund will over a period of time have a diversified portfolio spread across risk/reward curve. The scheme will focus on investing in mispriced credit with modest credit quality. A large part of the portfolio will be invested in high rated issuers in short and long term. The scheme would be relatively aggressive on credit but low to medium on interest rate sensitivity.
Salient Features of UTI- Credit Opportunities Fund
Eligible Investors:
The scheme is open to resident individuals, institutions as well as to NRIs and FIIs.
New Fund Offer Price: During the NFO, the units will be sold at face value of Rs.10/- .
Options Offered: Growth and Dividend option with payout and reinvestment facilities
Benchmark Index: CRISIL Composite Bond Fund Index
Facilities offered: Systematic Investment Plan (SIP), Systematic Transfer Investment Plan (STRIP) and Systematic Withdrawal Plan facilities are available.
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