Shriram AMC launches new liquid fund meant for low-risk investors

Scheme will invest in very short term debt and money market instruments up to 91 days, according to asset manager

Shriram Asset Management Company has announced a new liquid fund that it says has a relatively low-interest rate risk and moderate credit risk.

 

Shriram Liquid Fund, which opened on Monday and closes on Friday, will invest in debt and money market instruments. It will have an average maturity period of up to 91 days, said the company in a press statement.

 

The fund will focus on investing in A1+ rated instruments, prioritising stability and liquidity and with the goal of optimal balance in scheme returns by following a systematic investment approach.

 

“This fund could be helpful for retail investors in earning better returns than saving accounts on their idle cash, as well as for corporates for their cash management purposes as the scheme would provide liquidity with low volatility,” said Kartik L Jain, managing director and chief executive officer, Shriram Asset Management Company.

 

 

Liquid funds

 

Investors may consider using liquid funds as a solution for cash management, particularly when pausing before making further investments or as an option for holding surplus cash. Liquid funds allow investors to park their surplus funds temporarily, and they come with the added benefit of a Systematic Transfer Plan (STP). This plan lets investors move their money gradually into equity schemes, which is a helpful way to ease into the stock market.

 

 

Such funds serve as a stopgap investment and also help in diversifying a portfolio. Additionally, liquid funds can act as an alternative to a savings or current account and can serve as emergency funds for contingencies, providing relatively better returns through accrual income on a daily basis. One key benefit is that redemption proceeds are typically credited on the next business day, and investors have the flexibility to invest for any duration they choose.  

Details about Shriram Liquid Fund

 

Objective of scheme: The investment objective of the Scheme is to generate optimal returns consistent with lower to moderate levels of risk and high liquidity by investing in debt and money market instruments The fund maintains an average maturity in the range of <91 days. There is no assurance that the investment objective of the Scheme will be achieved.

 

Scheme type: The scheme is Open ended.

 

Benchmark: Shriram Liquid Fund will be benchmarked against NIFTY LIQUID INDEX A-I.

 

Date: The new fund offer of the scheme is open for subscription and will close on November 8.

 

Minimum investment: During NFO:Rs 1,000 and in multiples of Re 1 thereafter on continuous basis: Rs. 1,000 and in multiples of Re 1 thereafter.

 

Exit load: There is a graded exit load of up to six days and no exit load from the seventh day.

 

Fund manager: The scheme will be managed by Deepak Ramaraju, Gargi Bhattacharyya Banerjee, and Sudip Suresh .

 

Why invest in Shriram Liquid Fund?

 

According to the company, Shriram Liquid Fund would endeavour to invest in very short term debt and money market instruments up to 91 days which have a good credit quality and easy liquidity.

The very short maturity of the securities helps minimise the MTM volatility in the portfolio thus minimising capital risk.

 

Offers high liquidity allowing investors to redeem investment on any given business day.

 

Funds could potentially earn returns even for a day or the weekend.