Reliance Mutual Fund has filed draft offer documents with the Securities and Exchange Board of India (SEBI) for Reliance Overnight Fund, an open-ended debt scheme which will invest in overnight securities. Overnight securities have a maturity of one day. This category of mutual funds is considered low risk, as it is least affected by interest rate changes due to its short duration.
The scheme will invest upto 100 percent of its assets in debt instruments maturing on or before the next business day. These include securities like REPO/reverse REPO, commercial bills, treasury bills and so on. The scheme will not invest in securitized debt, short selling, credit default swaps.
Along with Reliance Mutual Fund, IDFC Mutual Fund also filed draft documents with SEBI on Tuesday (Nov. 20) for an overnight fund. Last week, ICICI Prudential launched a new fund offering (NFO) for its overnight fund. HDFC Overnight Fund, SBI Overnight Fund and UTI Overnight Fund have one-year returns of 6.13 percent, 6.20 percent and 5.66 percent, respectively. (As on Nov. 19, 2018)
CRISIL Overnight Index will be used as the benchmark for the Reliance Overnight Fund. the CRISIL Overnight Index tracks performance of money market portfolio with 100 percent allocation to Triparty Repo Dealing System (TREPS), which recently replaced CBLO as the underlying asset tracked by the index.
|Index Name||1-yr Returns (%)||3-yr Returns (%)||5-yr Returns (%)|
|CRISIL Overnight Index||6.03||6.24||6.98|
*Returns data as of October, 2018
The fund will be managed by Anju Chhajer, who also manages short duration debt schemes like Reliance Low Duration Fund, Reliance Ultra Short Duration Fund, Reliance Prime Debt Fund. Reliance Ultra Short Duration Fund has one-year returns of 7.85 percent and Reliance Low Duration Fund has one-year returns of 6.96 percent, as on November 19, 2018.
Date: 20 NOV 2018