Mahindra Credit Risk Yojana is a credit risk fund by Mahindra Asset Management Company Pvt Ltd, one of India’s newest mutual fund companies. The NFO period will run from 27th July to 10th August. Mahindra Mutual Fund is sponsored by Mahindra and Mahindra Financial Services Limited, and is not to be confused with Kotak Mahindra AMC.
Being an open-ended fund, it will reopen for purchase and sale after it is launched. The fund will invest 65-100% of its assets in bonds rated below AA+. It can invest 0-25% in other types of debt or money market instruments. It can also invest 0-10% of its assets in units of REITs and InVITs.
The fund will be benchmarked to a composite benchmark made up of the Crisil AA Short Term Bond Index (75%) and Crisil AAA Short Term Bond Index (25%). The yield on the former was 8.95% on 16th July 2018 and the yield on the latter was 8.39%. This only gives you a rough idea of possible future return because the fund is free to buy and sell bonds rather than hold them to maturity.
Rahul Pal will the fund manager at Mahindra Credit Risk Yojana. He was earlier the head of fixed income at Taurus AMC and a fixed income fund manager at Sundaram Asset Management.
As a new fund, Mahindra Credit Risk Yojana will have no track record, thereby weakening the case for investing in the fund. On the other hand, a small and nimble fund may be able to better spot opportunities than its larger peers.
NFO Period: 27th July to 10th August
Benchmark: 75% Crisil AA Short Term Bond Index and 25% Crisil AAA Short Term Bond Index
Minimum Investment Amount: Rs 1,000
Options: Growth and Dividend