The scheme will invest 70-100% of its assets in debt and 0-30% in equity. The objective of the scheme is to combine the stable returns of debt with the growth potential of equity.
The fund will be managed by Cheenu Gupta who is the manager at Canara Robeco Tax Saver Fund and Suman Prasad who is co-manager at several Canara Robeco Funds such as the liquid fund, ultra short-term fund, short duration Fund, savings Fund and the capital protection oriented series.
Of these, Canara Robeco Tax Saver has been assigned a one-star rating by Value Research and it has underperformed its category average over the past five years, three years and one year. It has delivered a 14.96% return over the past five years compared to 18.21% for the category.
On the debt side, Canara Robeco Short Duration fund comes closest to this fund in terms of tenure of holdings. It has also been managed by Suman Prasad since 2012. It has a three-star rating and has delivered a CAGR of 6.86% over the past five years compared to 9.62% for the category average.
Do note however that Canara Robeco Short Duration Fund is an open ended fund with a leeway to change its maturity and take interest rate risks. A dual advantage fund will typically buy debt securities of three-year duration in line with the life of the scheme. This tends to minimize what is known as ‘mark-to-market’ risk arising from interest rate changes.
Close ended funds have the advantage of preventing you from redeeming money out of impulse. On the other hand, you lose out on liquidity. The three-year tenure will mean long-term capital gains taxation on maturity. This is 20% for a non-equity fund such as this one, along with the benefit of indexation.
Coming to this scheme, a rising interest scenario means that you might end up locking in money at a relatively low interest rate.
Tenure: 1105 days (A bit more than 3 years)
Minimum Subscription Amount: Rs 5,000
Fund Manager: Cheenu Gupta and Suman Prasad
Benchmark: Crisil Hybrid 85:15 Conservative Index
Plans: Growth and Dividend Payout