Mirae Asset Corporate Bond Fund: Mirae Asset Investment Managers India has launched ‘Mirae Asset Corporate Bond Fund’ on Wednesday. It is an open-ended debt scheme, investing in corporate bonds rated AA + and above. A new fund offer (NFO) for subscription will open on 24 February 2021 and will close on 9 March 2021. The bond’s benchmark will be based on the Nifty Corporate Bond Index. The minimum investment in this scheme will be Rs 5000. After that there will be increase in multiple of one rupee. There is no exit load.
Key features of this fund
- The fund will primarily invest in corporate bonds rated AA + and above. Some of its exposure will also be in government securities and treasury bills.
- The fund will invest in the entire yield curve but target modified durations will be in the range of 2 to 5 years. This will depend on the interest rate outlook.
- The fund will operate as per the active portfolio management policy based on a flexible interest rate strategy.
- The fund will not currently invest in lower rating bonds or papers or perpetual (below AA rating) bonds. For now, its entire focus will be on creating a high quality portfolio based on its credit assessment process.
- This category has the potential to yield better risk-adjusted returns than other debt categories and traditional fixed instruments. Debt funds also get tax benefits due to holding for more than three years.
- One can also invest in this fund through SIP.
Suitable for these investors
- Investors who want to earn in the medium to long term.
- The investment will be mainly in high-quality corporate bond funds.
- If investors are not clear about this product, then they should consult their investment advisors.
Investment for three years!
Swaroop Mohanty, CEO, Mirae Asset Investment Managers Pvt Ltd said, “In the current environment, the focus of investors is on the liquidity along with returns in their portfolios. The aim of Mirae Asset Bond Fund is to generate income that has less risk. Also, its focus should be on high-quality investment and liquidity. Our effort will be that we give our investors a stable investment environment. This fund is suitable for those investors who are investing over a period of three years. And we believe that investors would like to invest in this fund through SIP. ”
Will corporate bonds be attractive next?
Mahendra Jaju, CIO (Fixed Income), NFO’s fund manager and Mirae Asset Investment Managers Pvt Ltd, says that the AAA bond yield curve has declined during the year. The credit spread is shrinking and the current yield is creating attractive investment opportunities in the AAA bond segment. Short-term average yield is higher than long-term average yield. This is an indication that the spread is so attractive that this investment can be taken advantage of. With the growth in the economy, the rating of high-quality corporate companies is likely to increase. Spread will increase in the coming months as corporate companies will raise funds from the market. This will prove to be the perfect time to enter the corporate fund with a three-year target. ”