Bajaj Finserv Mutual Fund on Monday (May 13) launched Nifty 1D Rate Liquid ETF. The New Fund Offer (NFO) period for this ETF is from May 13 to May 16 2024.
This is an open-ended exchange traded fund tracking Nifty 1D Rate Index with relatively low interest rate risk and relatively low credit risk.
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The scheme aims to provide current income with low risk while ensuring a high level of liquidity. It will primarily invest in tri-party repo on government securities or T-bills/Repo and Reverse Repo, closely mirroring the returns of Nifty 1D Rate index, subject to tracking error.
Targeted towards investors seeking short-term savings solutions, the ETF will offer a liquid scheme with low risk and high liquidity. The initial investment can start at ₹5,000, with subsequent investments allowed in multiples of ₹1.
The ETF will be managed by Siddharth Chaudhary and Nimesh Chandan. There will be no exit load for units sold through the secondary market on the stock exchange.
However, investors should note that brokerage on sales of units on stock exchanges shall be borne by them.
Large investors can redeem units directly with the fund at applicable NAV based prices if the redemption amount is greater than ₹25 crore, without any exit load currently applicable.
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Investment consideration
The Nifty 1D Rate Liquid ETF presents a decent option for investors seeking stability and liquidity in their investment portfolio, especially for short-term savings.
With its focus on low-risk securities covered by Nifty 1D Rate Index, the ETF offers a potential avenue for current income with relatively low interest rate and credit risk.
However, as with any investment decision, investors should conduct thorough due diligence and consider consulting with financial advisors to assess whether this ETF aligns with their investment objectives and risk appetite.
