All you need to know about NFO: Tata Floating rate Fund

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Introduction:

It is an open-ended debt scheme, which will invest in floating-rate instruments. The floating-rate fund invests in floating rate instruments (instruments whose yields change with change in benchmark rates) or in fixed coupon instruments, by using swaps, which are converted to floating rates.

Objective:

This mutual fund is an open-ended debt mutual fund. It will invest in floating-rate instruments and fixed-rate instruments which are converted for floating rate exposures using swaps or derivatives. Floating rate securities are debt securities with a floating interest rate, unlike bonds with fixed interest rates.

 NFO dates:

NFO has opened on 21st June and will close on 5th July.

Asset allocation:

65 to 100% investment will be in floating-rate bonds. 0 to 35% of the investment will be done in fixed-rate debt securities, 0 to 10% investment will be in units issued by REITs (Real estate investment trust) and InvITs (Infrastructure Investment Trusts)

Fund manager:

The fund manager is Mr. Akhil Mittal. He is a graduate and holds an MBA degree from University Business school. He has experience of almost 20 years in this field.

Entry and exit load:

Entry and exit load are nil for the scheme.

The minimum amount for purchase:

Minimum amount at the time of application is Rs. 5000 and after that, investment can be done in multiples of Rs. 1

Minimum amount for SIP:

SIP which is a Systematic Investment Plan for this scheme starts from 150 Rs.

Plans available:

Direct and regular plans are available. Along with that, a dividend option is available too.

Risk profile:

The scheme carries a Moderate risk. As it is a debt scheme and will going to invest in floating-rate instruments.

Benefits:

It invests in floating rate instruments. So, the benefit of higher interest can be earned here.

It offers flexibility for buying for different tenures and for choosing the optimal mix.

Who should invest?

Investors who want to take less risk can go for it. As the risk is moderate, the returns are expectedly safe. Apart from it, investors who want to take an advantage of changing interest rates can also invest in this scheme. Before doing an investment, make sure that you read and understand all the rules and conditions related to the scheme. As mutual funds do carry market risk.

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