ITI Mutual Fund launches NFO for dynamic bond fund.
Now, this is the 13th fund launched by the fund house, which start operated in April 2019.
On Friday, ITI Mutual Fund released a new fund offer (NFO) for a dynamic bond fund that will invest in debt and money market securities. The bond fund will be benchmarked against the Crisis Dynamic Debt Index when the NFO closes on July 9th.
“This is the fund house’s 13th fund launch since it began operations in April of this year.”
The fund’s goal is to maximize returns by actively managing portfolios that include debt and money market securities. The fund will adhere to a strategy that is geared to providing investors with the benefits of dynamic fund management via flexible asset allocation and active duration management.
Investors who find it difficult to predict interest rate movements would benefit from dynamic bond funds. These bond funds help investors reduce interest rate risk by allowing them to change their portfolio maturity based on interest rate changes.
“With the ITI Dynamic Bond Fund, we hope to meet the demands of investors searching for an all-season product that invests in debt and money market instruments to generate consistent returns,” said George Heber Joseph, the ITI Mutual Fund’s chief executive officer and chief investment officer.
The majority of investments, according to the fund company, will be in AAA or A1+ or equivalent rated securities. Vikrant Mehta will be in charge of the scheme.
The present value of the NFO is $5,000, with subsequent amounts in multiples of one. The scheme will have no entry or exit loads. There are currently more than 20 dynamic bond funds on the market, with an average return of 4.77 per cent over the last year, while three-year returns are 7.63 per cent, five-year returns are 7.14 per cent, and ten-year returns are 8.30 per cent.
In comparison, the State Bank of India’s fixed deposits (FDs) have returned 5.1 per cent over the last year, 6.7 per cent over three years, 7 per cent over five years, and 8.75 per cent over ten years.
Returns on FDs, on the other hand, are taxed at the investor’s slab rate, while short-term capital gains (up to three years) from debt schemes are taxed at the investor’s slab rate, and long-term capital gains (after three years) are taxed at 20% with indexation.
Investors should keep in mind that, in comparison to fixed-income securities, which are thought to be low-risk, dynamic bond funds carry a moderate risk.