ING Vysya Mutual Fund is planning to launch an open-ended Floating Rate Income Fund. Currently, there are 19 floating rate funds offered by 12 AMCs in India.
The primary objective of the Scheme is to generate regular income from a portfolio comprising substantially of floating rate debt instruments, fixed rate debt instruments swapped for floating rate returns, and also fixed rate instruments, short term bonds and money market instruments. The Fund can invest upto a maximum of 40 per cent of its corpus in fixed rate debt instruments and 60 to 100 per cent in floating rate debt instruments.
The Scheme offers two Plans: a) Short Term Plan (the portfolio of which will normally be skewed towards short-term maturities to ensure low interest rate risk) and b) Long Term Plan (the portfolio of which will be normally skewed towards longer-term maturities and will carry medium interest rate risk). The two plans will have separate portfolios.
Investors will have the choice of three options - Dividend Option, Bonus option and Growth Option under both Short Term Plan and Long Term Plans.
The Fund will be benchmarked to the CRISIL Liquid Fund Index.