NIFTY 1D Rate Liquid ETF launched by Shriram Mutual Fund
Shriram Mutual Fund has announced their plan to list Shriram Nifty 1D Rate Liquid ETF, an ETF that follows the Nifty 1D Rate Index. The scheme would be launched on July 1 and would close on July 3 only.
The aim of the scheme is to finance Tri-Party Repo on government securities, or treasury bills (TREPS). The investment objective of the scheme is to generate returns that will be closest to the NIFTY 1D Rate Index returns before expenses, with the possibility of tracking errors.
The performance will be based on the Nifty 1D rate index. Where the minimum amount is Rs. 1000, and after that, it will be in multiples of Rs 1.
The scheme shall make investments in tri-party repo on government securities, or T-bills, reverse repo and cash equivalents at 95–100% portions, and other money market instruments with a residual maturity of up to 30 days for 0-5%.
The limit on the maximum total expense ratio (TER) allowed under Regulations 52(6)(c)(i) and (6)(a) is up to 1%.
The fund is recommended to investors who are in the process of searching for a place to save their short-term money and need a safe and readily available form of money investment with rather modest returns. The principal invested in the scheme will be in a low-risk category, depending on the riskometer of the scheme.
This ETF is suitable for investors who wish to earn higher returns on their cash balances; hence, they are willing to take on slightly more risk while having most of their portfolio invested in safe and secure short-term instruments like overnight products.
There are also proposal enhancements, such as for margin pledges, from which active traders will benefit. Focusing on the current environment of financial commoditization, such a fund will aim to become an effective tool to help clients achieve their financial goals for investments in the present and future.
