Saturday, July 13, 2024

UNION AMC ANNOUNCES THE LAUNCH OF UNION GILT FUND

Union AMC today announced the launch of Union Gilt Fund. It is an open-ended debt scheme investing a minimum of 80% of its total assets in government securities (across maturities). Gilt funds are debt mutual funds that invest in government securities. Gilt mutual funds are an excellent replacement for bank FDs. They are safer and offer much higher returns than bank FDs. The New Fund Offer (NFO) of Union Gilt Fund opens on 18th July, and closes on 1st August 2022. The minimum investment required is Rs. 1,000 and in multiples of Rs. 1 thereafter. Credit risk: Since the funds invest in sovereign securities, there is no credit risk. Returns: Post the recent rise in interest rates, yields in the 4 -5 bucket are very attractive from a risk-return basis and are better than current FD rates.

Mr. G. Pradeep kumar, Chief Executive Officer (CEO), Union Asset Management Company Private Limited, said “The launch of Union Gilt Fund is in line with our constant endeavor to offer products that help our investors in wealth creation. We believe this Scheme will serve investors who are looking for credit risk free returns over a period of three years or more. With the introduction of this Scheme, our debt product basket now offers Schemes with varied credit and duration risk”.

Investment for a 3-year time horizon shall provide better risk-adjusted returns to the investor. Gilt mutual funds invest in government ‘debt’ and hence benefit from lower
debt taxation. If the investment is held for more than 3 years, an indexation taxation
benefit is available. This is not possible in the case of fixed deposits.

Since the fund is open-ended, an investor can easily redeem money anytime during the year. This may not be possible for bank fixed deposits where they may be a fixed
lock-in or premature withdrawal penalty. Also, the fund will invest in government securities that are highly liquid.

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