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The scheme will invest 50–65% in units of debt oriented mutual fund schemes of Baroda BNP Paribas Mutual Fund, 30–50% in units of arbitrage scheme of Baroda BNP Paribas Mutual Fund and 0-5% in money market instrumentsthus aiming to create a balanced and diversified portfolio that helps mitigate risk while enhancing return potential.
“For conservative investors looking beyond fixed income products or conventional debt funds, this fund offers the potential to earn better post-tax returns, especially for holding periods beyond two years,” said Prashant Pimple, CIO – Fixed Income, AMC.
“The concessional long-term capital gains (LTCG) tax rate of 12.5% makes this an attractive option for long-term savers in higher tax brackets,” he added.The fund will be co-managed by Prashant Pimple and Neeraj Saxena. The scheme will be benchmarked against Nifty Composite Debt Index 60% + Nifty Arbitrage Index 40% – TRI.The minimum application amount for lump sum investment is Rs 1,000 and in multiples of Re 1 thereafter. For daily, weekly, and monthly SIP, the minimum amount is Rs 500 and in multiples of Re 1 thereafter. For quarterly SIP, the minimum investment amount is Rs 1,500 and in multiples of Re 1 thereafter.
The Baroda BNP Paribas Income Plus Arbitrage Active FoF seeks to invest in a portfolio of fixed income and arbitrage schemes. It seeks to build a risk profile similar to lower-risk fixed-income schemes and would invest in the Baroda BNP Paribas Arbitrage Fund for its arbitrage allocation.
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The portfolio manager would select a fixed income scheme or multiple fixed income schemes with differential weights based on their views on macroeconomic variables, interest rates, credit environment, etc. The scheme intends to predominantly invest in debt schemes, thus providing investors a low-risk investment option
This scheme is ideal for investors seeking lower-risk mutual funds, tax-efficient income solutions, and alternatives to fixed-income products.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
