A new debt or fixed income based mutual fund is now open in the Indian markets. The fund belongs to IndiaBulls Asset Management mutual fund house and is called the IndiaBulls Income Fund. As the name suggests, this fund will collect money from Indian investors and invest it in the Debt instruments and securitized debt instruments for a steady return. It's an open ended debt scheme which means that any no. of investors with any amount can invest in this fund.
In this article, we will analyze how good is this IndiaBulls Income Fund NFO, whether this IndiaBulls Income Fund offers anything new or unique for the investors and whether the investors should invest in IndiaBulls Income Fund.
IndiaBulls Income Fund NFO: Review Analysis & Details
Let's begin with some basic details about IndiaBulls Income Fund.What are the NFO dates for IndiaBulls Income Fund?
Image sourced as screenshot from official Indiabulls mutual fund site
The NFO period for IndiaBulls Income Fund is from February 12, 2013 to February 26, 2013. After the NFO period, the regular buying, selling and redemption of fund units will start at a date 5 business days from date of allocation.
What is so unique about this IndiaBulls Income Fund?
Usually, whenever someone speaks about a mutual fund, investors assume it to be an equity based mutual fund. However, one must note that this is only a debt based fund i.e. your invested money will be used to buy only those financial securities which are interest giving - for e.g. a bond which pays you interest say at the rate of 8% per annum.
Apart from that, there is nothing so unique about this IndiaBulls Income Fund as it is similar to any other debt based fund available in the market.
What are the other competitor products available in comparison to IndiaBulls Income Fund?
There are many mutual funds available in the market which are debt based. Investors can consider those for a comparison.
Then there are the good old Fixed Maturity Plans FMP (See Introduction & Example). If more safety is needed, then you can go for interest bearing good old reliable Bank Fixed deposits or FD. See FMP v/s FD Comparison
What are the risks of investing and trading IndiaBulls Income Fund?
There are always risks involved in any kind of investment.
The investment objective of the fund is to generate steady income or returns, but it is not guaranteed. Debt based investments are usually less risky compared to equity, but the risk still persist, although less.
The variety of debt instruments, in which your money will be invested, will be decided by the fund manager. How those different debt instruments perform, whether your fund manager is able to get a good timely selection for you is something not in your control.
The variety of debt instruments can include Debt instruments, securitized debt including Repos in Corporate Debt Securities & Money Market Instruments.
These inherent risks are to be taken by the investor.
Final Thoughts about IndiaBulls Income Fund?
In summary - Another mutual fund focussed on debt instruments. Investors can look for this as a diversification tool at the market or country specific level provided they understand the risks listed above.
See List of All Mutual Fund and NFO Articles here
During NFO period:
Minimum investment Rs 5000 and in multiples of Re 1 afterwards. Additional Purchase Rs. 1000 and in multiples of Re. 1 /- thereafter
Tax benefit will NOT be available in IndiaBulls Income Fund.
There will be 2 plans for investors to choose from:
IndiaBulls Income Fund Entry Load: NIL
But it comes with very exit load at the initial stage:
IndiaBulls Income Fund Exit Load: 1% for exit (repurchase/switch-out) on or before 6 months, 0.5% for exit from 6 months (+1 day) to 1 year from the date of allotment. NIL beyond 1 year.
Asset Allocation:
Debt instruments and securitized debt* including Repos in Corporate Debt Securities: 65% to 100%
Money Market Instruments: 0% to 35%
SIP or systematic investment plan? No info.
The benchmark for IndiaBulls Income Fund will be CRISIL Composite Bond Fund Index
Mr. Raju Sharma, Head - Fixed Income at Indiabulls, will be the fund manager for IndiaBulls Income Fund.
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