Shriram AMC unveils Shriram Liquid Fund - A new way to manage short-term liquidity
A low-risk, high-liquidity investment option offering stable returns – ideal for retail and corporate investors.
Shriram Asset Management Company Limited, a prominent player in the mutual fund industry and part of the Shriram Group has announced the launch of the Shriram Liquid Fund, opening for subscription on November 4, 2024. This new fund is designed to provide optimal returns with low to moderate risk while offering high liquidity, making it an excellent alternative to traditional savings accounts for short-term investments.
The New Fund Offer (NFO) will be open until November 8, 2024, allowing investors to capitalize on a secure, research-driven product aimed at preserving capital while maximizing returns.
Features of Shriram Liquid Fund
- NFO Period: The NFO opens on November 4, 2024 and closes on November 8, 2024.
- Fund Type: Open-ended liquid scheme.
- Risk Profile: Low-interest rate risk, moderate credit risk.
- Investment Focus: Debt and money market instruments with up to 91 days of maturity.
- Minimum Investment: Rs 1,000 (Lump sum or SIP).
- Exit Load: Graded exit load up to six days, no exit load from the 7th day.
- Online Access: Investors can purchase and manage their investments via the Shriram Mutual Funds portal, providing a secure and convenient way to track and adjust their portfolios.
- STP Option: Investors can set up a Systematic Transfer Plan (STP), allowing funds to be gradually moved from the Shriram Liquid Fund to other Shriram Funds, making it a useful strategy in volatile markets.
Investment strategy and approach
The Shriram Liquid Fund will invest in high-quality A1+ rated instruments such as Certificates of Deposit (CDs), Commercial Papers (CPs), Treasury Bills (T-bills), and government securities (G-secs), focusing on stability and liquidity.
The fund will keep the average maturity of investments up to 91 days, ensuring minimal interest rate risk and low volatility. By spreading investments across sectors and focusing on top-rated papers, Shriram AMC aims to deliver a solid balance between stability, liquidity, and returns (SLR).
The fund will adopt a staggered portfolio allocation with approximately:
- 5 per cent in overnight papers
- 25 per cent in Certificates of Deposit (CDs)
- 50 per cent in Commercial Papers (CPs)
- 20 per cent in Treasury Bills (T-bills)
This allocation strategy will help maintain liquidity and provide steady returns, making the fund ideal for short-term cash management, both for retail investors and corporates.
Management Comments
Kartik L. Jain, Managing Director and CEO of Shriram Asset Management Company, emphasized the fund’s potential and said, "The Shriram Liquid Fund aligns with our commitment to offer innovative and flexible financial solutions. With its SLR approach, this fund is a great option for retail investors looking for higher returns than traditional savings accounts and for corporate investors managing surplus cash. It is an ideal choice for creating contingency funds while ensuring safety and liquidity."
Sudip More, Fund Manager at Shriram AMC, added, "Our focus with this fund is to offer short-term income opportunities by investing in high-grade instruments. By minimizing interest rate and credit risks, we aim to provide low volatility and consistent performance."
Should you invest?
The Shriram Liquid Fund is a suitable investment option for those looking for a safe and stable investment with high liquidity. It is particularly attractive for investors seeking a better return than traditional savings accounts while maintaining a low-risk profile. However, it's important to consider your individual financial goals and risk tolerance before making an investment decision.
Disclaimer: The article is for informational purposes only and not investment advice.