UTI Mutual Funds launches long duration funds. Check details here
2 min read . Updated: 06 Mar 2023, 04:45 PM IST
PremiumIt would open for subscription on 6th March, 2023 and closes on March 15, 2023
UTI Mutual Fund has launched Long Duration Fund NFO, an open ended debt scheme that invests in debt and money market.
It would open for subscription on 6th March, 2023 and closes on March 15, 2023. The portfolio Macaulay Duration is above 7 years.
The scheme aims to generate optimal returns with adequate liquidity by investing in a portfolio of debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be achieved. The scheme does not guarantee/ indicate any returns.
Long duration funds invest in long term fixed income securities which typically have a Macaulay duration above 7 years. These funds have the potential to deliver higher returns along with higher risk for a medium-term to long term financial goal.
Investors with long term investment goals and who want to diversify their retirement portfolio, may invest in this scheme.
During the NFO period, the units of the scheme will be sold at face value, i.e., ₹10 per unit. The minimum application amount is ₹5,000 and in multiples of ₹1 thereafter.- The scheme offers a Regular Plan and Direct Plan.
“It's important to diversify your investment portfolio by investing in a mix of equity and fixed income funds. This will help you mitigate risk and reduce portfolio volatility. Long duration fixed income funds are an appropriate option for investors with long term financial goals, such as saving for retirement or funding child’s education, etc," said Vetri Subramaniam, CIO, UTI AMC Ltd,"
"These funds can provide a relatively stable source of income, compounding and potential capital appreciation over a longer investment horizon. Additionally, investors in long duration debt funds can also benefit from tax-efficient withdrawals after a three year holding period. Capital Gains in fixed income funds held for more than 3 years are considered as long term capital gains and enjoy indexation benefit. This results in lower tax liability making them attractive for those seeking to maximize their after-tax returns," he added.
This scheme involves no ‘Entry Load’, which means that investors do not have to pay anything to park their earnings in this scheme.