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Motilal Oswal Mutual Fund announced a fund to invest in government bonds - India's first fund

 

MOTILAL Oswal Mutual Fund announced the launch of India's first fund that would provide access to the 10-year benchmark government of India securities by investing 90-100 per cent in 10-year G-secs (government securities).

The fund, named as Motilal Oswal MOSt 10 Year Gilt Fund, will be an openended gilt scheme, giving the investors an access to highly liquid and representative part of the G-sec market, the 10-year benchmark government of India dated security, the company said in a statement.

Investors now have a pure-play on the interest rate cycle as well as a longterm asset allocation product. As interest rate cycle may peak in the near future, this could be a good time to take an exposure to G-secs, and with optimal exposure in the 10-year G-sec investors may stand to gain from capital appreciation.

The new fund will emulate the risk and returns on the 10-year benchmark G-sec, which at present has a yield of 8.79 per cent maturity in 2021. Besides investing 90 to 100 per cent in 10-year benchmark G-sec, it will invest in other government securities of seven-12-year maturities, treasury bills, cash management bills, collateralised borrowing and lending obligation and repo in the range of 010 per cent. The fund will invest the maximum amount (90-100 per cent) in the 10-year benchmark G-sec. The NFO will be open for subscription from November 21 to December 5.
 

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