IDFC Mutual Fund has launched an open-ended debt scheme - IDFC Overnight Fund.
The fund seeks to offer an investment avenue for short term savings by looking to generate returns in line with the overnight rates and high liquidity.
The fund is ideal for overnight or weekend parking and has no exit load. The Fund offers very high liquidity to investors and hence is ideal for corporates, treasuries, institutions and individuals who are looking for high liquidity along with low interest rate and credit risk.
Harshal Joshi, Vice President, Fund Management, IDFC MF will manage this fund.
Sharing the rational for launching the Overnight fund, Gaurab Parija, Head – Sales and Marketing, IDFC AMC said, “With a residual maturity of typically one day there is very little interest rate risk, hence investors who invest in mutual funds to manage their very short-term liquidity will find the Overnight fund more lucrative.”
Overnight funds are a more conservative alternative to liquid funds. While liquid funds can invest in securities with maturity up to 91 days, overnight funds can only invest in securities with one-day maturity.