Ideal
time to shift to accrual oriented funds
After the recent hike in
Repo Rate by RBI, investors are looking towards short term income funds to gain
from high accrual coupled with income stability due to lower duration.
One such fund is UTI Short Term Income Fund which aims to generate reasonable returns
with low risk and high liquidity from a portfolio of money market securities
and high quality of debt with a average maturity cap of 4 years. The fund
attaches importance to high credit quality and portfolio diversification.
Sudhir
Agrawal, fund manager of UTI Short
Term Income Fund says, “With the expectations of CPI
inflation moving towards 5% in first half of next year, RBI may be under
pressure to hike rates further to bring inflation closer to its target. Further,
increase in cost of imports due to depreciation of rupee versus dollar may
result in upside risk to the CPI in coming months. In such a scenario,
investors should start shifting focus to short term income funds as these funds
offer high accrual along with lower volatility. We have been recommending
investors to look at our short term income fund with an investment horizon of 1
to 3 years.”
UTI
Short Term Income Fund has been consistently outperforming its benchmark CRISIL
Short-Term Bond Fund Index. Fund has given a return of 8.64% against its benchmark return of 7.63% since inception(as on August
31, 2018).
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