SBI Nifty Bank Index Fund - Direct (G): NFO Details
Union Short Duration Fund – Direct (G) : NFO Details
Last Updated: 14th January 2025 - 03:56 pm
Union Short Duration Fund – Direct (G) is a short-term debt mutual fund focusing on debt instruments with a Macaulay duration of 1 to 3 years. It is offered by Union Mutual Fund. The primary objective of this scheme is to provide reasonable returns and liquidity through investments in a diversified portfolio of debt and money market instruments, balancing safety, liquidity, and returns. The fund is designed for investors seeking moderate interest rate risk and moderate credit risk. This scheme allows for steady income generation by leveraging a range of debt instruments. The portfolio aims to benefit from stable returns while managing risks associated with interest rates and credit quality. The fund does not propose listing on any exchange, ensuring redemption proceeds are transferred within the regulatory time frame, barring exceptional circumstances. The benchmark for the scheme is the CRISIL Short Duration Debt A-II Index, providing a relevant performance comparison within the short-duration debt category.
Details of the NFO: Union Short Duration Fund – Direct (G)
NFO Details | Description |
Fund Name | Union Short Duration Fund – Direct (G) |
Fund Type | Open Ended |
Category | Debt Scheme - Short Duration Fund |
NFO Open Date | 15-January-2024 |
NFO End Date | 28-January-2024 |
Minimum Investment Amt | ₹1000/- and any amount thereafter |
Entry Load | -Nil- |
Exit Load |
1% if units are redeemed or switched out on or before completion of 15 days from the date of allotment. Nil thereafter. Nil if redeemed or switched out after completion of 15 days from the date of allotment of units. |
Fund Manager | Mr. Anindya Sarkar |
Benchmark | RISIL Short Duration Debt A-II Index |
Investment Objective and Strategy
Objective:
The Scheme is an actively managed Scheme with an investment objective to provide reasonable returns and liquidity by investing in a range of debt and money market instruments while maintaining the balance of safety, liquidity, and returns. There is no assurance that the investment objective of the Scheme will be achieved.
Investment Strategy:
- Asset Allocation: The scheme's investment strategy involves a diversified allocation of assets with the primary focus on debt and money market instruments, including government securities. The indicative allocation for these instruments ranges from 0% to 100% of the total assets.
- Securitised Debt: Up to 50% of the net assets may be invested in securitised debt, including Pass Through Certificates (PTC), to leverage structured financial instruments for steady income generation.
- Units Issued by REITs and InvITs: The scheme may allocate up to 10% of its total assets to units issued by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to capitalize on potential income and growth opportunities in the real estate and infrastructure sectors.
- Macaulay Duration: The fund will maintain a Macaulay duration between 1 year and 3 years, ensuring a balanced exposure to short-term interest rate movements and enhancing the portfolio's stability.
- Derivatives and Hedging: To mitigate risks, the scheme may employ various derivative and hedging strategies as permitted by SEBI. This includes using derivatives for managing interest rate risk and achieving portfolio optimization.
- Cumulative Exposure: The cumulative gross exposure through debt, money market instruments, derivative positions, repo transactions, and units issued by REITs and InvITs will not exceed 100% of the net assets. However, cash or cash equivalents with a residual maturity of less than 91 days will not be counted towards this limit.
- Liquidity Management: The scheme may invest a portion of its total assets in Tri-Party Repos on Government Securities or Treasury Bills (TREPS) to meet liquidity requirements, ensuring that the fund can handle redemptions efficiently.
- Regulatory Compliance: All investments and strategies will adhere to SEBI's regulatory framework, ensuring compliance with circulars and guidelines for mutual funds.
What Kind of Investor Should Invest in Union Short Duration Fund – Direct (G)?
Union Short Duration Fund – Direct (G) is suitable for investors seeking moderate returns with a focus on safety and liquidity. It is ideal for those with a short to medium-term investment horizon, typically between 1 to 3 years. Investors looking for a diversified portfolio of debt and money market instruments with controlled interest rate and credit risks will benefit from this fund. It is also suitable for those seeking steady income generation through structured financial instruments like securitised debt and who prefer an actively managed scheme with exposure to REITs and InvITs.
Risks Associated with the Union Short Duration Fund – Direct (G)
Investing in Union Short Duration Fund – Direct (G) comes with certain risks, including interest rate risk due to the Macaulay duration of 1 to 3 years, where changes in interest rates could impact the fund's returns. Credit risk is another concern, as the fund invests in various debt instruments that may be subject to issuer default. Additionally, market risk from exposure to REITs and InvITs can affect the fund's performance. While the scheme employs derivatives and hedging strategies, these do not eliminate all risks, and investors should consider their risk appetite before investing.
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