Tata Mutual Fund has introduced New Fund Offer, it will close on 5th July. Through this you will get many options. This is also a better opportunity for earning.
Tata launches NFO
Tata Mutual Fund has announced the launch of Tata Floating Rate Fund. It is an open ended debt scheme, which primarily invests in floating rate instruments. In this, fixed rate instruments are converted into floating rate exposure through swaps or derivatives. Through this, investors can get an opportunity to earn. This New Fund Offer (NFO) is open on 21st June i.e. today, which will close on 5th July.
The company will try to generate stable returns through NFO. This includes floating rate debt, fixed rate debt instruments swapped for floating rate returns. There are also money market instruments available. The fund aims to invest minimum 65% of its corpus in floating rate securities issued by corporates or government and convert fixed interest securities to floating through derivatives.
What is floating rate fund
Floating rate fund refers to a fund that does not have a fixed rate of interest. This interest rate changes from time to time. These are linked to the benchmark rate so it is changed at regular intervals. In this way, the change in the benchmark rate also affects the interest rate of the floating rate bond. Such bonds reduce the interest rate risk. These bonds offer higher returns when rates rise. Floating rate funds invest in either floating rate instruments (instruments whose yields change with the change in benchmark rates) or fixed coupon instruments, which can be converted to floating rates using swaps. are given.
A good alternative to other debt funds
As per a Mint report, Akhil Mittal, Senior Fund Manager, Tata Asset Management, said, “We have launched our new fund, Tata Floating Rate Fund, in the debt category in line with the upcoming rate cycle, and it will also be available for other debt funds or products. Will provide a good alternative.”
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