Fidelity Mutual Fund has launched an open-ended
income scheme called Fidelity Short Term Income Fund. The scheme aims to generate “reasonable”
returns primarily through investments in fixed income securities and money
market instruments. The NFO opened on November 19, 2010 and will close on November
30, 2010. Shriram Ramanathan will manage this fund. The scheme is benchmarked against
Crisil Short Term Bond Fund Index.
“In the current environment where short-term
yields have moved up significantly, on a risk-adjusted basis, short-term income
funds provide a good opportunity for investors to benefit from the higher
yields, yet keeping interest rate risk at an acceptably low level,” said
Shriram Ramanathan, Fund Manager, Fidelity Mutual Fund. Fidelity Short Term
Income Fund with its freshly constructed portfolio of short term instruments
with attractive yields and sound credit quality makes even more investing sense
in such a scenario, Ramanathan said. The fund has been assigned Credit Risk
Rating mfAAA by ICRA.
The scheme comes with growth and dividend
options. The minimum initial investment is Rs 5,000. The fund carries an exit
load of 0.50 per cent, if redeemed within 6 months from the date of purchase. The scheme allows investments under systematic
investment plans (SIPs) with minimum amount of Rs 500 per month. The scheme
also offers systematic transfer plans (STP) and systematic withdrawal plans (SWPs).
There is no exit load in SWPs for withdrawals after six months. For withdrawals
within the first six months, there is an exit load of 0.5 per cent.
Investors can invest in the Fidelity Short Term
Income Fund even through the SIP route with a minimum amount of Rs 500 per
installment with the total of all installments not being less than Rs 5000. The
fund house has Rs 8,536 crore of assets under management (AUM) as on September