Birla Sun Life AMC is planning to launch an open-ended income fund called Birla Dynamic Bond Fund. It has filed the offer document for the same with the SEBI.
The investment objective of this Scheme is to optimise returns by designing a portfolio which will dynamically track interest rate movements in the short term by reducing duration in a rising rate environment while increasing duration in a falling interest rate environment. The investment strategy would revolve around structuring the portfolio so as to capture positive price movements and minimise the impact of adverse price movements.
The fund would invest 0-100 per cent in fixed income securities which includes cash/liquid instruments like money market and short-term debt papers. The scheme may also invest upto 50 per cent of the net assets in such derivative instruments as may be introduced from time to time for the purpose of hedging and portfolio balancing and other uses as may be permitted. The scheme may also invest a part of its assets (not exceeding 50 per cent of the net assets in overseas markets in bonds and mutual funds and such other debt instrumentsas may be allowed from time to time.