New Investment Opportunity: Bajaj Finserv AMC Introduces Gilt Fund
Bajaj Finserv AMC has announced the launch of the Bajaj Finserv Gilt Fund, offering investors a new avenue to achieve reasonable returns with minimal credit risk. This open-ended debt scheme is designed to invest in government securities with varying maturities, providing a credit-risk-free investment option.
Bajaj Finserv Gilt Fund NFO is open from December 30, 2024 to January 13, 2025. One can now seize the opportunity and roll with the economic altering circumstances to reap the benefits.
Key Features of Bajaj Finserv Gilt Fund
1. Type of fund: An open-ended, debt-oriented scheme investing solely in government securities.
2. Objective: The scheme aims to gain returns with no credit risk through investment in sovereign securities and instruments linked therewith.
3. Benchmark: Tracks the CRISIL Dynamic Gilt Index.
4. Risk Profile: Offers relatively high-interest rate risk with relatively low credit risk.
5. Minimum Investment: Requires a minimum of Rs.5,000, with additional investments in multiples of Rs.1.
6. Investment Options: Includes Growth and IDCW (Income Distribution cum Capital Withdrawal) options under both Regular and Direct Plans.
7. Another Investment Options: Provides investments through lump sum or Systematic Investment Plan (SIP).
Investment Policy
The primary investment would be in the sovereign securities issued by the Central or State Governments. It may also invest in reverse repos, triparty repos on government securities, treasury bills and other instruments that are allowed by the Reserve Bank of India.
About the Economic Conditions
With the launch of this fund, the economic trends are finally favourable with emerging phenomena like moderating inflation and even potential reductions in interest rates from global central banks. Such developments are expected to be exploited by the structure of this fund as a strategic form of investment that gives stable returns over medium to long periods.
Why Invest Now?
Pros:
- Credit Risk-Free : Government securities as backing ensure an investment is immune to credit risks.
- Potential Gains From Rate Cuts : Investors get a falling rate environment and softening of inflation.
- Diversified Maturity Profile : The profile will be a perfect navigator against any interest-rate change scenario.
Cons:
- Interest Rate Risk : High returns might be reflected in the varying return streams from this investment as the interest-rate scenario changes in favour of/against the underlying investments.
- Not Suitable for Short-Term Aims: The fund is best for investors who can hold their investment for the medium to long term.
The Bajaj Finserv Gilt Fund stands out as an attractive choice for those who are seeking to diversify their fixed-income portfolios. It is specifically designed to invest in government securities, making it a very safe investment for people who want to benefit from potential rate cuts and economic growth. Though it does come with interest rate risks, the fund is best suited for long-term investors with a moderate risk appetite.
As Bajaj Finserv Gilt Fund allows stability, least credit risk with steady growth potentials, investors tend to invest through it in this category.
