NFO: Invesco India Medium Duration Fund

By Morningstar |  29-06-21 | 

Invesco Mutual Fund has launched Invesco India Medium Duration Fund - an open-ended medium term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 3 years and 4 years.

Invesco India Medium Duration Fund seeks to generate income by investing in a portfolio of debt and money market securities. Over 75% - 85% of exposure will be to ‘AAA’ rated Corporate and Government Securities (G-Secs including SDLs). With an aim to enhance portfolio yield, the fund will invest 15% - 25% of the net assets in very select ‘AA’ category corporate bonds and will utilize its in-house proprietary credit assessment framework to select such issuers.

The fund will also aim to identify issuers, which are expected to witness improvement in their credit metrics. Such selected issuers will not only provide the benefit of high accrual, to begin with, but also the mark to market gains opportunity with credit spread compression. The fund will not invest in bonds that are rated below AA-. At all times, the scheme will target securities, which can offer an optimal level of yields/returns, while giving due emphasis to its risk-reward characteristics.

“The fund is aimed at capturing the current market opportunities both on the yield curve as well as on the credit market. If you look at the current fixed income markets, the yield curve has steepened during pandemic; at the short end, yields have moved sharply lower on account of ample systemic liquidity & accommodative monetary policy stance; while the long end of the curve has still remained elevated due to higher fiscal concerns, though anchored by RBI through various tools like Government Securities Acquisition Program (G – SAP). With this backdrop in mind, we believe the 3- 5 years segment which offers high accrual presents itself as an attractive investment opportunity from risk-reward perspective. Investors with a medium to a long term horizon with moderate risk appetite can consider investing in this fund,” said Saurabh Nanavati, Chief Executive Officer, Invesco Mutual Fund.

No Exit load will be charged. The fund is benchmarked to CRISIL Medium Term Debt Index and will be managed by Vikas Garg and Krishna Cheemalapati.

The New Fund Offer is open for subscription from June 29, 2021 and will close on July 13, 2021.

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