A clever way to invest in Gilts
Debt funds also offer great diversification to asset classes such as equity and gold. Therefore there should be room for debt funds in any investor’s portfolio. If you are a risk-averse investor and are looking at investment options outside equities, you can maintain a higher allocation to debt funds within your portfolio. Even if you are an aggressive investor with a higher risk tolerance, you should look to maintain some lower allocation to debt funds. Debt funds are not correlated with equity markets. Thus maintaining a diversified portfolio will allow investors to not get overly exposed to the ups and downs of a single asset class like equity. In summary, allocating to debt funds should improve the portfolio outcomes for both conservative and aggressive investors. Work with your financial advisor to understand what the optimal allocation to different asset classes needs to be.
A clever approach to achieving target portfolio maturity
Axis Constant Maturity 10 year Fund (CMT)is an innovative offering by Axis Mutual Fund
. The fund invests in a portfolio of government securities while seeking to maintain a constant average portfolio maturity of 10 years. Thus investors in the fund have a clear understanding of their portfolio maturity. This allows the fund to be used by informed investors to achieve their own target portfolio maturity.
Simply combine CMT with a liquid or money market fund and you can achieve any maturity bucket between 0-10 years. Further the fund does not simply invest in the 10-year benchmark. Since the benchmark stock typically tends to trade at a premium, allocating to other bonds can add to the performance even while the portfolio maturity is maintained.
Key Features of Constant Maturity 10 Year Fund
- An open-ended Gilt (Government securities) fund with no exposure to equities
- Suitable for an investment horizon of 1 year or more
- Seeks to maintain average portfolio maturity close to 10 years
This Product is suitable for Investors who are seeking
- Stable returns in the short to medium term
- Investment in debt and money market instruments across the yield curve and credit spectrum
Investors should consult their financial advisers if in doubt about whether the product is suitable for them