WITH volatility in equity markets staying at peak due to uncertain global markets and interest rates still at ele vated levels, L&T Mutual Fund on Wednesday an nounced the launch of L&T Short Term Debt Fund.
The fund, which opened for subscription on Decem ber 7, will close on Decem ber 21. It has been bench marked against Crisil Short Term Bond Fund Index.
Ved Prakash Chaturvedi, chief executive, capital markets and investment management group, L&T Finance Holdings, said, "Our sense is that the yield curve provides significant opportunity in the six months to one year period.
We expect a moderation in interest rates over a period of time and this product will benefit investors."
Pinaki Paul The scheme would invest in debt and money market instruments with residual maturity up to 24 months, having low risk profile, while the average maturity of the scheme shall not exceed three years, the fund said.
The fund would infuse funds in corporate deposits, commercial papers, government securities, money market and other debt and fixed income instruments having short-term maturity.
"The fund is an appropriate fixed income product to benefit in the short term from the possible change in interest rate scenario in the coming quarters," said Chaturvedi.
The fund expects to see interest rate tightening by the central bank soon, as a result of which attractive investment avenues may be available to investors in short-term debt instruments. On the present liquidity situation, the fund said increase in base rates of banks has resulted in borrowing costs rising sharply for companies.
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