Publish Date:
ITI Mutual Fund has launched a new open ended hybrid scheme - ITI Conservative Hybrid Fund.
Classified as a Conservative Hybrid Fund, the scheme is mandated to invest predominantly in debt instruments, along with small portion in equity and equity related securities.
The investment objective of the scheme is to generate regular income through investments in debt & money market instruments, along with capital appreciation through limited exposure to equity and equity related instruments. However, there can be no assurance that the investment objective of the scheme will be realized.
Under normal circumstances, 75% to 90% of the funds portfolio will be invested in Debt and Money Market instruments. It can invest 10% to 25% of its assets in Equity & Equity related instruments. Upto 10% of its assets can be invested in Units issued by REITs and InvITs
As per the Scheme Information Document (SID), ITI Conservative Hybrid Fund seeks to generate regular income through investments in debt & money market instruments, along with capital appreciation through equity and equity related instruments. Within fixed income, the portfolio would be actively managed to optimize returns within the respective asset class.
Strategy - Debt and Money market instruments: ITI Conservative Hybrid Fund proposes to invest in a diversified portfolio of high quality debt and money market instruments. The fund manager will allocate the assets of the scheme taking into consideration the prevailing interest rate outlook & the liquidity of the different instruments. Such outlook will be developed by in-house assessment of various macro factors like economic growth, inflation, credit pick-up, liquidity and other such factors as considered relevant.
Credit portfolio management will be primarily guided by external credit ratings assigned by any of the recognized credit rating agency. Additionally, as may be deemed appropriate, inputs may be taken from financial statement analysis, management review, industry trends, capital structure and covenant analysis to identify securities for inclusion / exclusion from credit portfolios. Efficient portfolio construction will be used to manage interest rate risk across different asset class and duration buckets, and optimise risk-adjusted returns.
Strategy – Equity: ITI Conservative Hybrid Fund will invest in equity and equity related instruments of companies that are part of Nifty50 Index. The Fund Manager will pick stocks from the Nifty index which are predominantly good companies with market leadership, low leverage and trading at attractive valuations.
Strategy – Derivatives: ITI Conservative Hybrid Fund intends to use derivatives actively for the purpose of hedging and portfolio balancing as may be permitted under the Regulations from time to time. The same shall be within the permissible limit prescribed by SEBI (Mutual Funds) Regulations, 1996 from time to time.
The Scheme may invest into equity and fixed income derivatives maximum upto 50% of the equity and debt component respectively, as per the asset allocation table, subject to the guidelines as may be issued by SEBI and RBI from time to time.
Derivative transactions that can be undertaken by the Scheme include a wide range of instruments, including, but not limited to Futures, Options, swaps, any other instrument, as may be regulatory permitted.
ITI Conservative Hybrid Fund’s performance will be benchmarked against Nifty 50 Hybrid Composite Debt 15:85 Total Return Index.
The fund will be managed by Mr Vikrant Mehta (Debt) and Mr Pradeep Gokhale (Equity).
The NFO opens for subscription on February 21, 2022, and closes on March 07, 2022. The scheme will reopen for continuous sale and repurchase on or before March 21, 2022.
The fund’s NAV is priced at Rs 10/- per unit during the NFO period. The minimum subscription amount is Rs 5,000 and in multiples of Re 1 thereafter.
The fund offers Regular Plan and Direct Plan having Growth Option and Income Distribution cum capital withdrawal (IDCW) Option (Payout and Reinvestment Facility).