Which debt fund to invest in 2020? Here is an option to benefit across multiple MFs

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Published: January 9, 2020 2:17:07 PM

Axis All Seasons Debt Fund of Funds is an Open-Ended Fund of Funds scheme investing in debt oriented mutual fund schemes.

 Axis Mutual Fund, Axis All Seasons Debt Fund of Funds, Debt Fund of Funds, categorization , rationalization mutual fund schemes, sebi,Axis All Seasons Debt Fund of Funds, may offer a comprehensive one-stop solution for long term debt market investors.

Axis Mutual Fund has announced the launch of its new fund which is a debt fund of funds. Called ‘Axis All Seasons Debt Fund of Funds’, it may very well offer a comprehensive one-stop solution for long term debt market investors. The All Season Debt FoF will invest in funds from across fund houses and across different categories of the debt market with an intention to generate an optimal return over the medium term. The fund will target adequate diversification across fund houses and schemes to manage its portfolio risk. If you are looking to invest in a debt fund in 2020, this could be an option to explore.

Axis All Seasons Debt Fund of Funds is an Open-Ended Fund of Funds scheme investing in debt oriented mutual fund schemes. The new fund offers (NFO) opens for subscription on 10th January 2020 and closes on 22nd January 2020. The minimum application amount for this fund is Rs. 5,000 and in multiples of Re 1, with an additional investment of Rs. 1,000 and in multiples of Re 1 thereafter. The fund will be managed by R. Sivakumar.

The categorization and rationalization of mutual fund schemes were done by SEBI in October 2017. The exercise was aimed at making the selection of MF schemes easier for the investors. Post categorisation, the debt fund group ended up with 17 different debt fund categories such as Long Duration Fund, Dynamic Bond, Gilt Fund etc. As each category will have its own unique features, one needs to carefully select based on one’s need and goal.

Picking the right debt MF scheme may at times become difficult for the investor. The debt market can be tough for investors to navigate as different segments of the market perform at different times. Also, the debt Mutual Fund category is highly segmented creating confusion for investors while deciding the appropriate fund to invest in. The All Season Debt FoF will probably make the task much easier for the investor.

According to the fund house, the main advantages of this structure are:

  • Professionally Managed Portfolio of debt mutual funds
  • Ability to dynamically change the portfolio based on market opportunities
  • Diversification across multiple funds and fund managers to ensure tighter risk management
  • Tax efficiency – no tax at the fund of fund level while rebalancing the portfolio

Debt funds suit those investors who have goals that are at least 3 years away. Being a fund of fund (FOF), the cost in terms of expense ratio will be higher in such funds. So, invest in debt funds based on your risk profile and the goal for which you need to invest in them.

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