An open ended medium term debt scheme investing in instruments such that the Macaulay Duration# of the Portfolio is between 4 years and 7 years. A relatively high interest rate risk and moderate credit risk.

Since the Macaulay Duration of the portfolio will be managed in the range of 4 – 7 years under normal circumstances, the Scheme is subject to interest rate risk on an ongoing basis. The investment team of the AMC will take into account the macro economic conditions, including factors affecting both liquidity and interest rates.

The Scheme shall endeavour to develop a well-diversified portfolio of debt (including securitised debt) and other instruments.

Macaulay Duration (Duration) measures the price volatility of fixed income securities. It is often used in the comparison of interest rate risk between securities with different coupons and different maturities. It is defined as the weighted average time to cash flows of a bond where the weights are nothing but the present value of the cash flows themselves. It is expressed in years. The duration of a fixed income security is always shorter than its term to maturity, except in the case of zero coupon securities where they are the same.