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 2010.
