The product combines the advantages of an FMP with a window for subscription and redemption.
In the last five months, ICICI Prudential Mutual Fund, HDFC Mutual Fund, DWS Mutual Fund and Reliance Mutual Fund have filed their offer documents for Interval Debt Funds. According to market experts, apart from above mentioned AMCs, there are four other AMCs who would be soon filing their offer document for Interval Fund.So, expect to see a rush of NFOs soon in the market.
These funds are similar to FMPs but it is operationally easy for AMCs to manage interval funds as they do not require fresh regulatory approval to continue such funds, shared an AMC official. In other words, Interval funds are like FMPs which do not require fresh permissions. Essentially it is a close-ended fund which is open for two business days during specified transaction period (STP) for subscription / redemption / switches requests from customers and again starts operating as a close ended debt fund
These funds aim to generate income through investments in debt / money market instruments and Government Securities maturing on or before the opening of the immediately following STP. “We feel that this fund will help investors to get better return in debt fund category. Our fund will invest in Government securities and debt instruments and money market instruments,” said a senior official from a top mutual fund house.
