Mirae Asset launches Corporate Bond Fund with an aim to generate returns with moderate risk

Mirae Asset Investment Managers India has launched Mirae Asset Corporate Bond Fund. The new scheme is an open-ended debt scheme predominantly investing in AA+ and above rated corporate bonds. The NFO will open for subscription till March 9. The fund will be benchmarked with the Nifty Corporate Bond Index and will be managed by Mahendra Jajoo, CIO -Fixed Income, Mirae Asset, India.

The fund will invest across the yield curve but target Modified Duration will be within the range of 2-5 years based on interest rate outlook. The fund will follow an active portfolio management based on flexible interest rate strategy. The fund house also mentioned that the scheme does not prefer investing in lower rated papers (AA and below) and perpetual bonds at the moment and focus will be to create a high quality portfolio based on their credit assessment process.

“In the present environment, investors are looking for both returns and liquidity in their portfolios. Mirae Asset Corporate Bond Fund aims to generate income with moderate risk while remaining focused on high quality and liquidity. Since investments will be in corporate papers, the focus will be on our risk management process. Mirae Asset due to its strong credit process was not exposed to most stressed asset cases, and will endeavour to provide a stable investment experience to our investors. This fund is suitable for investors looking for an investment horizon of over three years and we believe investors can look at SIP way of investments in this fund,” said Swarup Mohanty, CEO, Mirae Asset Investment Managers (India) Pvt. Ltd.

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The AAA bond yield curve has steepened during the year. Credit spreads are tightening and current yields present attractive investment opportunities in the AAA bond segment. The short term average yields are above their long term average. This indicates that spreads are still attractive to take advantage. “Benefit of improving rating prospects for high quality corporates in an improving economy and likely widening of spreads with higher credit pick up in coming months may provide investors a good entry point to invest in Corporate Bond Funds with a 3 year time horizon” said Mahendra Jajoo, CIO – Fixed Income, Mirae Asset Investment Managers (India) Pvt. Ltd.

The minimum initial investment in the scheme will be Rs. 5,000/- and in multiples of Rs. 1/- thereafter. There is no exit load in the fund.


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