NFO alert: Bajaj Finserv AMC launches the Bajaj Finserv Gilt Fund
Bajaj Finserv Gilt Fund is a credit risk-free investment option for medium to long-term returns with a focus on government securities.
Bajaj Finserv AMC has introduced the Bajaj Finserv Gilt Fund, a new investment avenue designed for individuals looking for reasonable returns with minimal credit risk. As an open-ended debt scheme, the fund invests in government securities across varying maturities.
The New Fund Offer (NFO) is open from December 30, 2024, and closes on January 13, 2025, providing investors with a strategic opportunity to benefit from favourable economic trends.
Key Features of Bajaj Finserv Gilt Fund
- Type of Fund: Open-ended debt scheme investing in government securities.
- Objective: To generate credit risk-free returns through investments in sovereign securities and related instruments.
- Benchmark: CRISIL Dynamic Gilt Index.
- Risk Profile: Relatively high interest rate risk and relatively low credit risk.
- Minimum Investment: Rs 5,000 and multiples of Re 1, thereafter.
- Investment Options: Growth and IDCW options are available under Regular and Direct Plans.
- Modes of Investment: Lump sum or Systematic Investment Plan (SIP).
Investment strategy of the fund
The fund invests primarily in sovereign securities issued by the Central or State Governments. It may also allocate resources to reverse repos, and triparty repos on government securities, treasury bills, and other RBI-approved instruments.
Management comments
Ganesh Mohan, CEO, Bajaj Finserv AMC stated “With inflation moderating and central banks worldwide considering rate cuts, this fund is designed to capitalize on economic shifts. Investors can benefit from an all-weather fund like the Bajaj Finserv Gilt Fund, especially in a favourable policy environment supporting growth.”
Should you invest?
The Bajaj Finserv Gilt Fund is a strong contender for those looking for a relatively safe investment avenue with the potential for medium- to long-term growth.
Here are key considerations:
- Pros:
- Credit risk-free due to government-backed securities.
- Opportunity to gain from potential rate cuts and inflation moderation.
- Diversified maturity profile to navigate varying interest rate scenarios.
- Cons:
- High-interest rate risk; fluctuations in rates may impact returns.
- Not ideal for short-term investors or those with low risk tolerance.
Bottom line
This fund is particularly suited for investors with a medium- to long-term horizon seeking stable returns while minimizing credit risk. It’s a compelling option for diversifying a fixed-income portfolio or for those looking to capitalize on potential rate cuts.
Disclaimer: The article is for informational purposes only and not investment advice.