Mirae Asset Mutual Fund has unveiled a new fund offering in the debt segment. Mirae Asset Corporate Bond Fund will open for NFO subscriptions on February 24 before closing on March 9. The scheme will re-open for continuous sale and purchase on March 18. The investment objective of the scheme is to provide income and capital appreciation by investing predominantly in AA+ and above rated corporate bonds. Read on to know more.
Mirae Asset Corporate Bond Fund offers a reasonable amount of safety with at least 80% exposure is in AA+ and above rated corporate bonds. Also, liquidity is not expected to be a trouble in normal times as the fund will be heavy on top rated papers. Corporate bond funds endeavour to provide better risk adjusted returns and are also preferred by investors with moderate risk profiles for Systematic Investment Plan (SIPs) with 3 years horizon.
What is the investment framework
Mirae Asset Corporate Bond Fund will primarily make investments in AA+ and above rated corporate bonds and in some in Government Securities and other Debt and Money Market Instruments.
In terms of duration management, the new corporate bond fund will do investments across the yield curve but the target Macaulay Duration will be within the range of 2-5 years.
For risk management, the fund at present will maintain a portfolio of high quality and not invest in instruments below AA.
Fund manager – Mahendra Jajoo
Minimum investment amount – Rs 5,000
Exit load – Nil
Plans – Regular Plan and Direct Plan
Options – Growth Option and Dividend Option (Payout & Re-investment)
SIP amount – Monthly and Quarterly is Rs 1000 and for a minimum of 5 installments
Who can invest
Mirae Asset Corporate Bond Fund is suitable for investors who want stable returns and want to avoid credit risks. This is ideal for investors who have moderate risk profiles, and at least 3 years of investment tenure. If you can remain invested for 3 plus years, you can enjoy benefits of long-term capital gains taxation.
Bank fixed deposit rates are on a declining trend. 3 to 5 year FD rates are in the range of 5.3 – 5.5% for leading public and private sector banks. Traditional fixed income investments like Bank FDs are taxed as per the income tax slab rate of the investor. Long term capital gains (investment tenure of 3 years or longer) in debt funds are taxed at 20% after allowing for indexation benefits. Indexation benefits can reduce your tax obligation considerably.
Why Mirae MF
Mirae Asset as a fund house has a robust credit risk appraisal and management process.
Also, Mahendra Jajoo as fund manager is highly experienced and has a strong long term track record.