UTI Mutual Fund (UTI) launches UTI Long Duration Fund, an open-ended debt scheme investing in debt and money market instruments such that the portfolio Macaulay Duration is above 7 years. The scheme will have a relatively high interest rate risk and relatively low credit risk. The NFO starts on March 6, 2023 and closes on March 15, 2023.
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.
Mr. Vetri Subramaniam, CIO, UTI AMC Ltd, commented on the launch, “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. 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.”
Salient features of UTI Long Duration Fund
- Eligible Investors
- Investors with long-term investment goals
- Investors aiming to diversify their retirement portfolio
- Investors who have a low-risk appetite for credit exposures, seeking a high-quality portfolio and tax-efficient reasonable returns
- New Fund Offer Price
- During the NFO period, the units of the scheme will be sold at face value, i.e., INR 10/- per unit
- Minimum Application Amount
- The minimum application amount is INR 5,000/- and in multiples of INR 1/- thereafter
- Plans and Options Available
- Regular Plan and Direct Plan – Both Plans offer Growth & IDCW options
- Load Structure
- Entry Load: NA
- Exit Load:
Redemption/Switch out
- a) within 3 years from date of allotment:
- Up to 10% of allotted units: NIL
- Beyond 10% of allotted units: 1%
- b) After 3 years from the date of allotment: NIL
- Benchmark Index
- CRISIL Long Duration Fund AIII Index
Product Label & Riskometer
| UTI Long Duration Fund
An open-ended debt scheme investing in instruments such that the Macaulay duration of the portfolio is greater than 7 years. Relatively High Interest rate risk and Relatively Low Credit Risk. |
|
| This product is suitable for investors who are seeking:*
• Long term wealth creation • A debt scheme that invests in debt and money market instruments with an aim to maximise income while maintaining an optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them. |
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| Potential Risk Class Matrix | |||
| Credit Risk → | Relatively Low
(Class A) |
Moderate
(Class B) |
Relatively High
(Class C) |
| Interest Rate Risk ↓ | |||
| Relatively Low
(Class I) |
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| Moderate
(Class II) |
|||
| Relatively High
(Class III) |
A-III | ||
| A-III: Relatively High Interest Rate Risk and Relatively Low Credit Risk | |||
Note: Product labeling assigned during the New Fund Offer (NFO) is based on an internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
