TrustMF launches short-term fund: Should you invest?

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TRUST Asset Management Company (AMC) announced the launch of its New Fund Offer (NFO) – the TRUSTMF Short Term Fund. The fund aims to develop a portfolio of the highest-rated issuers for investors to benefit from the continuing steepness in the Yield Curve, especially in the 1-3 year segment. The NFO will be available for subscription between July 20 and August 3, 2021, and will be managed by Anand Nevatia as a Fund Manager.

This is TRUST Mutual Fund’s third launch, following the January 2021 launch of TRUSTMF Banking & PSU Debt Fund and the April 2021 launch of TRUSTMF Liquid Fund.

What is the fund’s investment strategy?

TrustMF Short Term Fund will follow a disciplined investment approach backed by proprietary methodology with the goal of generating consistent risk-adjusted returns. The comprehensive technique was established in partnership with CRISIL, the knowledge partner for initial debt schemes of TRUST Mutual Fund.

That said, the fund will primarily invest in debt and money market instruments with a portfolio duration between 1-3 years.

Management views

As per the management, the steepness in the yield curve may provide an opportunity to generate capital gains and some cushion against yield increase.

“Short Term Income Funds have emerged as the most reliable fixed income category, having delivered consistent returns in times of volatile interest rates as well as uncertain credit environment. At TRUST Mutual Fund, we have crafted an innovative short-term fund for our investors, which will aim to deliver consistent returns by taking advantage of the inherent steepness in the yield curve, ideal for a minimum 6-12 month investment horizon,” said Sandeep Bagla, CEO, TRUST Mutual Fund.

What investors should know?

There is no exit load, and it is suitable for investors who are seeking low to moderate risk. However, investors should consult their financial advisors to check whether the product is suitable for them.

The total expense ratio on the fund attracts 22 basis points on a direct plan and 72 basis points on a regular plan. This fund is ideal for a minimum 6-12 months investment horizon.

Fund follows a unique limited active methodology of fund management which aims to build a portfolio of highest-rated issuers.