Bajaj Finserv Gilt Fund – Direct (G) : NFO Details

The Bajaj Finserv Gilt Fund-– Direct (G) is an open-ended debt scheme from Bajaj Finserv Mutual Fund, designed to generate credit risk-free returns by investing in sovereign securities issued by the Central or State Governments, as well as securities guaranteed by the Government of India. The scheme may also include investments in reverse repos, triparty repos, treasury bills, or similar instruments as per RBI regulations.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

The New Fund Offer (NFO) opens on December 30, 2024, and closes on January 13, 2025. There are no entry or exit loads applicable, providing flexibility to investors. The minimum investment amount is Rs. 5,000, with additional investments allowed in multiples of Re. 1. This scheme is ideal for conservative investors seeking steady and risk-free returns through government-backed securities.

Details of the NFO: Bajaj Finserv Gilt Fund – Direct (G)

Investment Objective and Strategy

Objective:

The objective of the Scheme is to generate credit risk-free returns through investments in sovereign securities issued by the Central Government and/or State Government(s) and/or any security unconditionally guaranteed by the Government of India, and/or reverse repos in such securities as per applicable RBI Regulations and Guidelines. The Scheme may also be investing in Reverse repo, Triparty repo on Government securities or treasury bills and/or other similar instruments as may be notified from.

Investment Strategy:

The scheme shall manage and operate its investment strategy within the inhouse framework of the INQUBE
fund philosophy. The INQUBE fund management philosophy is based on first principles understanding of the market dynamics. The process at its core emanates from the studied realisation that fund alpha is an outcome of three edges namely the Information edge, the Quantitative edge and the Behavioural edge of the investment team. At its core, the INQUBE investment philosophy borrows from human nature and behavioral finance as a knowledge discipline.

The maturity profile of debt instruments will be selected in accordance with the Fund Manager's view regarding market conditions, interest rate outlook, stability of rating and liquidity requirement. The fund management team will strive to maintain a consistent performance by maintaining a balance between safety, liquidity and returns aspects of various investments. Investment views/ decisions will consider parameters like prevailing interest rate scenario, quality of the security/ instrument, maturity profile of the instrument, liquidity of the security, growth prospects of the company/ industry, and other factors in the opinion of the fund management team.

The fund management team may deploy various quantitative tools, indicators, data analytics etc. in different combinations from time to time to develop/validate/reassess/analyze the investment decisions. Portfolio Turnover: Being a debt scheme, portfolio turnover is not applicable. The scheme being an open ended scheme, it is expected that there would be frequent subscriptions and redemptions. Hence, it is difficult to estimate, with any reasonable measure of accuracy, the likely turnover in the portfolio. If trading is done frequently there may be an increase in transaction cost such as brokerage paid etc. The fund manager shall endeavour to optimize portfolio turnover to maximize gains and minimize risks keeping in mind the cost associated with it. The Scheme has no specific target relating to portfolio turnover.

This fund is for what kind of Investors?

This product is suitable for investors who are seeking:

• • Credit risk free returns over medium to long term,
• • Investments mainly in government securities of various maturities. 

Risk Associated with the Bajaj Finserv Gilt Fund – Direct (G)

1. Interest Rate Risk: The fund’s returns may be affected by fluctuations in interest rates, as changes in rates influence the valuation of government securities in the portfolio.  

2. Market Risk: Despite being a gilt fund, there is potential exposure to market risk due to macroeconomic factors impacting bond prices and yields.  

3. Liquidity Risk: In adverse market conditions, the fund may face challenges in selling securities quickly without significant price discounts.  

4. Reinvestment Risk: Proceeds from maturing securities may be reinvested at lower interest rates during a declining rate scenario, potentially impacting returns.  

5. Regulatory Risk: Changes in RBI regulations or government policies concerning gilt funds could affect the scheme's operation and strategy.  

6. Credit Risk-Free Nature: Although the fund invests in government-backed securities, it does not eliminate risks related to market volatility or interest rate changes.  

7. Benchmark Risk: The fund’s performance is benchmarked against the CRISIL Dynamic Gilt Index, and deviations from this benchmark could affect investor expectations.  

8. Transaction Cost Risk: High portfolio turnover due to frequent subscriptions and redemptions might lead to increased transaction costs, impacting net returns.  

9. Behavioral Risk: Investor behavior, such as premature redemptions during market volatility, can disrupt fund stability and impact performance.  

10. Operational Risk: Operational challenges, including fund management strategy execution or unforeseen errors, could potentially affect returns.