The net assets of the Plans will be invested in Debt, Money market instruments and Government Securities which mature on or before the opening of the immediately following Specified Transaction Period. However, in case of securities with put and call options the residual time for exercising the put option of the securities shall not be beyond the opening of the immediately following Specified Transaction Period.
Though every endeavor will be made to achieve the objectives of the Scheme, the AMC/Sponsors/Trustees do not guarantee that the investment objectives of the Scheme will be achieved. No guaranteed returns are being offered under the Scheme.
Investments made from the corpus of the Plans would be in accordance with the investment objective of the Scheme and the provisions of the SEBI (MF) Regulations. The AMC will strive to achieve the investment objective by way of a judicious portfolio mix comprising of debt, money market instruments and government securities. Every investment opportunity would be assessed with regard to credit risk, interest rate risk and liquidity risk.
A detailed credit evaluation of each investment opportunity will be undertaken. The AMC will utilise ratings of recognised rating agencies as an input in the decision making process. Investments in bonds and debentures will usually be in instruments that have been assigned high investment grade ratings by a recognised rating agency. In line with SEBI Circular No. MFD/CIR/9/120/2000 dated November 24, 2000, the AMC may constitute committee(s) to approve proposals for investments in unrated instruments. The AMC Board and the Trustee shall approve the detailed parameters for such investments. The details of such investments would be communicated by the AMC to the Trustee in their periodical reports. It would also be clearly mentioned in the reports, how the parameters have been complied with. However, in case any security does not fall under the parameters,the prior approval of Board of AMC and Trustee shall be sought.
Interest Rate Risk
An interest rate scenario analysis would be performed on an on-going basis, considering the impact of the developments on the macro-economic front and the demand and supply of funds. The Scheme would keep the maturity of its debt assets within the next specified transaction period. This would limit the market risk of the portfolio.
Since investors can subscribe/ redeem/ Switch units of the Plan(s) under the Scheme only during the Specified Transaction Period (STP) and the assets would also mature on or before the STP, the liquidity risk would be minimised.