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Monday, December 07, 2009

Baroda Pioneer PSU Bond Fund floats on

NFO period from 7 December – 21 December 2009 

Baroda Pioneer Mutual Fund has announced the launch of Baroda Pioneer Public Sector Undertaking (PSU) Bond Fund, an open-ended debt fund. The new fund offer (NFO) period will remain open for fresh subscription from 7 December till 21 December 009. The portfolio of the fund would predominantly consist of PSU bonds and Government Securities of varying yields and maturities.

The fund would look to deliver competitive return on investments by designing a portfolio that will dynamically track interest rate movements with low credit risk due to its exposure to PSU Bonds. The fund offer investors the added benefit of high liquidity and stable ratings because of its investment strategy.

Speaking on the occasion, Rajan Krishnan, Chief Executive Officer, Baroda Pioneer AMC said, “The events witnessed the world over in the last one-year has been an eye-opener of sorts to many investors. Today, they are increasingly looking to manage their portfolio with limited risk exposure and stable returns. Baroda Pioneer PSU Bond Fund offer investors a stable portfolio of bonds issued by some of the top-rated PSU in India. PSU have strong fundamentals and sustainability required to maintain long-term growth. With interests in high growth sectors like infrastructure, capital goods, oil & gas etc, PSU are expected drive India's growth over the next few years”.

The fund is ideal for those who have an investment horizon ranging from 6 months – 1 year. The scheme has been rated mfAAA by ICRA - the highest-credit quality long-term rating assigned by ICRA to debt funds. The core portfolio would consist of papers having a maturity of 2-3 years. The scheme would look to ride on the yield curve as well as benefit from high accrual income in the event of a change in the interest rate scenario. PSU bonds by its very nature are extremely liquid. Further liquidity would be managed through investments in PSU Bank CDs.

Details of the scheme:

The face value of the new issues will be Rs 10 per unit.

The investment objective of the PSU Plan is to generate stable returns with lower risk by investing in fixed income instruments of Public Sector Undertakings (PSUs) – banks, financial institutions, & companies.

The scheme offers two options: growth and dividend options. Dividend payout and reinvestment facilities will be available under dividend option. In dividend option, there will be monthly dividend option and quarterly dividend option.

The minimum investment amount is Rs 5000 and in multiples of Re 1 thereafter.

The scheme seeks to collect a minimum corpus of Rs 1 crore during NFO period.

The scheme will invest 65-100% in debt & debt related instruments with daily call/put option of PSUs/Public Financial Institutions & money market instruments issued by PSUs /Public Financial Institutions with low to medium risk profile. The fund will invest up to 35% in treasury bills / government securities created and issued by the Central Government and/ or State Government(s) and /or other similar instruments, as may be permitted from time to time. 

The scheme may invest in securitized debt up to 25% of its net assets. No investment will be made in foreign securitised debt. The scheme will invest in debt derivative up to 50% of the net assets of the scheme.

The scheme will not charge any entry load while the scheme will charge 0.50% if redeemed on or before 90 days.

The benchmark index for the scheme would be Crisil Bond Fund Index.

Alok Sahoo will manage the investments under the scheme.
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