Overview: IDBI Mutual Fund has launched IDBI Gilt Fund, an open ended gilt scheme. The New Fund Offer (NFO)
opened for subscription on December 5, 2012 and will close on December 17, 2012. The units are available at par
(Rs.10/-) during the NFO and at NAV related prices thereafter. The scheme will re-open for continuous sale and
repurchase from December 27, 2012.
Objective: The investment objective of the scheme is to provide regular income along with opportunities for capital appreciation through investments in a diversified basket of central government securities, state government securities, treasury bills and similar other instruments.
Asset Allocation: The scheme will allocate 65% to 100% of assets in Government of India dated Securities/ State
Government dated Securities/Government of India T Bills/ CMB. On the other hand it would allocate 0% to 35% of
assets in CBLO and repo/reverse repo in Central Government or State Government securities with low risk profile.
NFO Note December 06, 2012
Comments from Fund House: Mr. Debasish Mallick, MD & Chief Executive Officer, IDBI Asset Management Ltd said "IDBI Gilt Fund is an approved instrument for investment by exempt Provident Funds, Superannuation Funds, Gratuity Funds and also under the New Pension Scheme. IDBI Gilt Fund will invest in Gilt securities which bear zerocredit risk and offer adequate liquidity. The Fund will dynamically manage duration of gilt securities so as to optimize returns, in the backdrop of present uncertainties. The launch of IDBI Gilt Fund is in line with the endeavour to offer products across the entire spectrum of investment options to suit all classes of investors and their diverse needs."
Basic Details: The minimum application amount for lumpsum is Rs. 5,000. The minimum application amount for SIP is Rs. 500. There will ba an exit load of 0.5% for exiting (repurchase/switch-out/transfer) within 30 days from the date of allotment. SIP, STP and SWP facilities available. Benchmark for the scheme is CRISIL Gilt Index.
Fund Manager: This scheme will be managed by Mr. Gautam Kaul. Mr. Kaul is a Commerce Graduate and holds MBA in finance. Prior to joining IDBI AMC, has worked with Religare AMC, with Sahara India Asset Management Company Pvt. Ltd. for one year and with Mata Securities (India) Pvt. Ltd. from April 2001 - November 2005. He manages other schemes such as IDBI Liquid Fund (4 Star by Value Research), IDBI Ultra Short Term Fund (4 Star), IDBI Short Term Bond Fund (1 Star), IDBI Fixed Maturity Plan, IDBI Monthly Income Plan and IDBI Dynamic Bond Fund.
Investment Strategy: The scheme will under normal circumstances invest in a diversified basket of dated Government Securities and Treasury Bills, the allocation between them to be decided on the interest rate outlook for the economy. The Fund Manager will take active calls on interest rate and will position the portfolio accordingly with requisite emphasis on liquidity and safety. The Fund Manager will calibrate the portfolio exposure (maturity, supply of securities and liquidity) depending on the interest rate outlook and overall macroeconomic environment.
Conclusion: IDBI Gilt is belonging to Gilt - Long Term category. Given in the current scenario of easing or delayed easing interest rates in the domestic front, investing in Gilt and long duration funds are considered as better investment strategy as they can generate better returns once the interest rates start to fall. Even though the performance of the debt schemes that are managed by the fund manager is good, investors can wait for some times till the scheme proves its performance.
HDFC Sec NFO Rating: "Invest in other better NFOs".