Tata Mutual Fund today announed the launch of a new mutual fund scheme, the Tata Dynamic Bond Fund, an open ended debt fund, as a part of its strategy to offer a comprehensive product range for all its investors across the risk-reward spectrum. The initial issue period for the scheme was September 1 to September 2, 2003 and the issue re-opened on September 9, 2003.
The Tata Dynamic Bond Fund will aim to move across asset and maturity segments and undertake active maturity management to take advantage of the dynamic interest rate scenario. It will endeavour to provide reasonable returns and high liquidity by investing in debt instruments and money market instruments so as to spread the risk across different kinds of issuers in the debt market.
As the debt market is expected to be volatile in the near to medium term, leading to arbitrage opportunities across different maturities and asset classes, active maturity management will be the key differentiator in performance. The Tata Dynamic Bond Fund will try to accomplish this objective for an investor through an active fund management strategy in a tax efficient way and with lower transaction costs.
Speaking on the occasion, Ved Prakash Chaturvedi, chief executive officer, Tata TD AMC, said, "This reinforces our commitment to present products appropriate to the needs of investors in various markets. We feel that it is an appropriate time to launch a bond product, which will proactively manage the maturity profile of the portfolio."
"As a fund house with a demonstrated capability of managing maturities across a spectrum of debt offerings, we are uniquely poised to offer our investors the benefit of active fund management in a volatile market through the Tata Dynamic Bond Fund. The initial response has been extremely encouraging for us," he added.
Tata Dynamic Bond Fund would be available under two options Option A and Option B. Under each option there are two plans, Bonus / Income and Growth. The minimum investment for Option A is Rs 5,000 while that for Option B is Rs 1,00,000. There is no maximum limit for investment. While there is no entry load for either options, for Option A there is an exit load of 1 per cent, if redeemed within 365 days from the date of allotment.
Statutory details: Investment manager: Tata TD Asset Management Private Limited (Investment manager for Tata TD Mutual Fund) Trustee: Tata TD Trustee Company Private Limited. Statutory details: Constitution: Tata TD Mutual Fund has been set up as a trust under the Indian Trust Act, 1882. Sponsors: Tata Sons Limited, Tata Investment Corporation Limited, TD Bank Financial Group Incorporated.
Nature and investment objective: Tata Dynamic Bond Fund: An open ended debt scheme. To create a liquid portfolio of good quality debt as well as money market instruments so as to provide reasonable returns and liquidity to the unit holders.
Risk factors: Mutual funds and securities investments are subject to market risks and there can be no assurance and no guarantee that the scheme will achieve its objectives. As with any investment in stocks, shares and securities, the NAV of the units of the scheme can go up or down, depending on the factors and forces affecting the capital markets. Past performance of the schemes, the sponsors or its Group affiliates are not indicative of and do not guarantee the future performance of the scheme. Tata Dynamic Bond Fund is only the name of the scheme and does not in any manner indicate either the quality of the scheme, its future prospects or the returns. Investment in interest bearing securities are subject to interest rate risk, credit risk and liquidity risk. Pursuant to allotment of bonus units the NAV of the scheme would fall in proportion to the bonus units allotted and as a result the total value of units held by the investor would remain the same. The sponsors are not responsible or liable for any loss resulting from the operations of the scheme beyond the initial contribution of Rs 1 lakh made by them towards setting up the fund. Please read the offer document carefully before investing.