These products predominantly aim to enhance returns by investing in certificate of deposit (CD) and long duration papers.
While a few fund houses have already launched their open ended Banking and PSU Debt Funds, many others are waiting for SEBI’s approval to launch them. Fund Managers remain hopeful that RBI would cut repo rate and this would further boost their performance.
Value Research data shows that the Axis Banking Debt-G Fund has given an annualized return of 9.16 percent while ICICI Prudential Banking and PSU Fund has posted an annualized return of 9.98 percent. Similarly, IDFC’s Banking Debt Fund has delivered an absolute return of 2.78 percent since its launch in March 2013 and DWS MF’s Banking & PSU Debt Fund has given an absolute return of 3.56 percent since its launch in March this year.
Suresh Soni, MD and CEO of DWS MF said that the Banking and PSU Fund aims to provide safety and low risk to the investors. “We launched our fund in March since most of the CDs of banks and PSU are traditionally available in the month of March. Till date, the fund has performed fairly well and we are hopeful of maintaining our performance.”
DSP Blackrock has filed a draft offer document with SEBI to launch its Banking and PSU Debt Fund. The scheme aims to generate income by investing in a portfolio of high quality debt and money market securities including CDs as well as long duration papers.
UTI has also filed a draft offer document with SEBI to launch its Banking and PSU Fund. R Raja, Head of Product UTI MF said that the investors looking for a high quality portfolio with low risk could invest in the banking and PSU fund. This is an open ended scheme which predominantly invests in CDs of PSU and banks. He informed that the scheme seeks to generate steady and reasonable income with low risk and high level of liquidity from a portfolio of debt and money market security issued by banks and public sector undertakings.
Gajendra Kothari of Etica Wealth Management said that the Banking and PSU Funds predominantly aim to enhance returns by investing in low risk CDs and long duration papers.
