Mumbai: DSP BlackRock Investment Managers Pvt. Ltd, one of the premier asset management companies in India, today announced the launch of the DSP BlackRock Ultra Short Term Fund (DSPBR USTF). DSPBR USTF is an open ended income (Debt) Scheme that seeks to generate a reasonable return commensurate with risk from a portfolio constituted of money market securities and debt securities. The NFO period for DSPBR USTF would be between February 27 and March 4, 2015.
The weighted average maturity of DSPBR USTF will be between 6 months and 1 year. The Scheme will invest at least 80% of total assets in money market securities and/or debt securities maturing within 1 year. The Scheme may invest up to 20% of total assets in debt securities with residual maturity greater than 1 year.
DSPBR USTF will generally invest in liquid, high quality and predominantly money market instruments maturing in 6 months to 1 year. Money market yields normally harden in the last quarter of the financial year. The RBI is expected to reduce the Repo Rate further in March / April 2015 against the backdrop of lower inflation. This is likely to result in a further decline in money market yields, in our opinion.
The fund will be managed by Laukik Bagwe. The scheme is benchmarked to 50% of the CRISIL Composite CP Index and to 50% of the CRISIL Composite CD Index. There are two plans viz. Direct Plan and Regular Plan, with both of them offering Growth and Dividend options.
Mr. Dhawal Dalal, EVP and Head- Fixed Income, DSP BlackRock Investment Managers Pvt Ltd said, “The Reserve Bank of India has embarked on a rate reduction cycle with a 25 basis-point reduction in the Repo Rate on Jan 15, 2015. We expect money market yields to trend lower further amid improvement in systemic liquidity and a likely further decline in the Repo Rate. Investors may consider investing in DSPBR USTF if they believe that short term yields will trend lower in the medium term.’’
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