UTI Mutual Fund (UTI) has launched UTI Long Duration Fund, which is an open-ended debt scheme investing in debt and money market instruments such that the portfolio Macaulay Duration is above 7 years, the fund house said in a statement. The fund will track CRISIL Long Duration Fund AIII Index
The new long-duration fund will have a relatively high-interest rate risk and relatively low credit risk. The New Fund Offer (NFO) for UTI Long Duration Fund started on 6th March 2023 and it will close on 15th March.
According to the UTI Mutual Fund, the new scheme will aim to generate optimal returns with adequate liquidity by investing in a portfolio of debt and money market instruments. However, there is no assurance that the investment objective of the scheme will be achieved. Further, the scheme does not guarantee/indicate any returns.
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“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 a child’s education, etc.” said Vetri Subramaniam, CIO, UTI AMC.
“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 benefits. This results in lower tax liability making them attractive for those seeking to maximize their after-tax returns,” he added.
Who may invest
- 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
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During the NFO period, the units of the scheme will be sold at face value, i.e., Rs 10 per unit. The minimum application amount is INR 5,000/- and in multiples of INR 1/- thereafter
Plans and Options
Regular Plan and Direct Plan – Both Plans will offer Growth and IDCW options
(Disclaimer: The above content is for information purposes only, based on a press release by UTI Mutual Fund. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing)