Why opt for a constant maturity fund?
A constant maturity fund takes away the fund manager's risk. In normal gilt funds, fund managers take active duration calls by increasing or reducing the duration depending on their views on rates.
There are chances of this call going wrong. These fund manager calls can also go against your own timing calls. For instance, an investor who is expecting rates to fall invests in a gilt fund, but the fund manager may expect the rates to rise and sits on short duration papers. Since the scheme will be investing a minimum of 95% in securities covered by Nifty 10-year GSec Index, that risk is not applicable to this fund. The fund manager would also keep cash levels at the minimal to control tracking error.
Since this is an ETF and will be listed in the NSE, direct investment and redemption fa cility will be allowed only for authorised participants and large investors.
Retail investors will have to buy and sell from the stock exchange, paying additional brokerag es. There is no entry load during the NFO period, so investors participating in the NFO can avoid one leg of brokerage. However, these investors can get stuck if there is no liquidity in the secondary markets. Investors should wait till it is listed and make sure there is enough liquidity before getting in.
The AMC has estimated that up to 1.50% of the daily net assets will be charged to schemes as expenses. This is high for a passively managed fund and compared to other constant maturity products.
Top 10 Tax Saver Mutual Funds to invest in India for 2016
Best 10 ELSS Mutual Funds in india for 2016
1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. Franklin India TaxShield
4. ICICI Prudential Long Term Equity Fund
5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
7. DSP BlackRock Tax Saver Fund
8. Reliance Tax Saver (ELSS) Fund
9. Religare Tax Plan
10. Birla Sun Life Tax Plan
Invest in Best Performing 2016 Tax Saver Mutual Funds Online
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
---------------------------------------------
Leave your comment with mail ID and we will answer them
OR
You can write to us at
PrajnaCapital [at] Gmail [dot] Com
OR
Leave a missed Call on 94 8300 8300
-----------------------------------------------
