Union Asset Management Company (Union AMC) has launched Union Corporate Bond Fund (“the Scheme”), an open ended debt scheme predominantly investing in AA+ and above rated corporate bonds.
The New Fund Offer Period of the Scheme opens on 4th May 2018 and closes on 18th May 2018. The Scheme re-opens on 1st June 2018 for continuous subscription and redemption.
As per the scheme information document, it is a moderately low risk scheme, where income will be generated through interest accrual and capital appreciation by investing in fixed income securities of varying maturities.
According to the AMC, “the scheme is over a medium to long term period, the Scheme is more tax efficient as compared to most traditional investments offering fixed rate of interest.”
Furthermore, the Scheme may be lower on volatility and risk parameters as compared to other asset classes, the AMC added.
Investments in debt mutual fund schemes when held for more than three years are eligible for Long Term Capital Gain Tax (LTCG) with indexation benefit making post-tax returns on debt funds attractive than most traditional investments.