IDFC MF has announced the launch of a new fund offer called Credit Opportunities Fund. This fund aims at the mid-yield segment to build the core of a portfolio. The fund concentrates on evaluating credit risk and to generate returns by investing in a portfolio of debt securities across the credit spectrum.
The fund will evaluate possible the underlying securities on a whole host of parameters such as promoter quality, business risk and financial risk among other credit evaluation metrics.
The fund provides liquidity and higher returns to investors with respect to investments in debt related returns. This fund aims at understanding the management quality of the business and risk parameters in terms of business.
Vishal Kapoor, CEO, IDFC MF said: "IDFC Credit Opportunities Fund will aim to better segment, the risk-reward trade-off profile in the credit f ound space. The fund will look to optimize the higher risk associated with the credit fund category."
80 percent of the fund will be benchmarked to Crisil AA Medium Term Bond Index and 20% to Crisil AAA Short Term Bond Index. Since the product carries credit risk, IDFC AMC is clear with the 'Risk Reward Profile' and elaborate on the types of risks associated with the fund offering.
The credit oriented strategy and the client allocative perspective are the key segments to discover in order to be successful with the launch of credit opportunity funds. While credit funds have a risk, IDFC AMC thrives on finding room for credit products.
Arvind Subramanian, Fund Manager, says: "It is the endeavor of the investment team to largely select issuers that are either evolving businesses with a strong promoter backing, or robust business models with improving financials."
A minimum application amount for this fund is Rs 5,000. Growth and dividend options will be offered direct and regular plans under the NFO. 1% exit load will be levied for investors if the fund is redeemed within 365 days from the allotted date.
BW Reporters
The author is a journalist with BW Businessworld
