Bajaj Finserv Money Market Fund, an offering from Bajaj Finserv Mutual Fund, has opened for subscription on Monday. This new fund offer (NFO) will be available till July 20, 2023. This is an open ended debt scheme investing in money market instruments with relatively low interest rate risk and moderate credit risk, the fund house said.
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The investment objective of the scheme is to generate regular income through investment in a portfolio comprising of money market instruments. However, there is no assurance that the investment objective of the scheme will be achieved, as per the fund house.
Liquidity
The scheme is an open ended debt scheme. It will open for sale and repurchase/redemption of units within 5 business days from the date of allotment. Being an open ended scheme, the scheme is open for repurchase/redemption on all business days. Redemption proceeds shall be dispatched within three working days from the date of redemption request.
Benchmark
The benchmark is NIFTY Money Market Index B-I.
Minimum application amount
During the NFO period, the minimum application amount is Rs 1,000 and in multiples of Re 1 thereafter.
Minimum redemption amount
Re 1 and in multiples of Re 0.01 or the account balance of the investor, whichever is less, the fund house said.
Fund manager
Siddharth Chaudhary and Nimesh Chandan are the fund managers.
Where will the scheme invest
The scheme will invest up to 100 percent of the total assets in money market instruments having a maturity of up to 1 year. The scheme will retain the flexibility to invest in the entire range of money market instruments.
1) Certificate of Deposits (CDs)
2) Commercial Paper (CPs)
3) Commercial bills
4) Treasury bills
5) Government securities having an unexpired maturity up to one year
6) Tri-party Repos on Government securities or treasury bills (TREPS)
7) Commercial usance Bills (Bills of exchange/promissory notes of public sector and private sector corporate entities) Rediscounting, usance bills and commercial bills.
8) Securities issued by banks (both public and private sector) including term deposit with the banks as permitted by SEBI/RBI from time to time, subject to approval from SEBI/RBI as required and development financial institutions.
9) Money market instruments permitted by SEBI/RBI
10) Derivative instruments like Interest Rate Future, Interest Rate Swap, Forward Rate Agreement and such other derivative instruments permitted by SEBI.
11) Units of Mutual Fund Schemes.
12) Repo transactions in corporate debt securities.
13) Any other domestic fixed income securities as permitted by SEBI/ RBI subject to requisite approvals from SEBI/RBI, if needed.
Plans and options
Bajaj Finserv Money Market Fund offers direct and regular plans. In the growth option, the Income Distribution cum Capital Withdrawal (IDCW) option with Payout of Income Distribution cum Capital Withdrawal sub-option, Reinvestment of Income Distribution cum Capital Withdrawal sub-option and Transfer of Income Distribution cum Capital Withdrawal sub-option are available.
(Source: Fund document)
Understanding money market funds and should one invest
A money market fund is an open-ended mutual fund that invests in short-term debt securities such as US Treasury bills and commercial paper. While it provides diversification, experts say it is only for short-term saving because they invest in highly liquid securities with the objective of capital preservation and income.
Also, there are chances of lower returns compared to riskier investments. There is lack of government insurance and vulnerability to inflation risk. So, before deciding to invest in Bajaj Finserv Money Market Fund, it is essential to understand one's objective and risk taking ability.
Here are 2,3,5 and 10 years returns of some of the money market funds:
| Scheme Name | 2-year | 3-year | 5-year | 10-year |
| UTI Money Market Fund - Direct Plan - Growth Money Market Fund | 5.47% | 5.01% | 6.22% | 7.18% |
| HSBC Money Market Fund - Direct Plan - Growth Money Market Fund | 5.14% | 4.57% | 6.06% | 7.37% |
| Nippon India Money Market Fund - Direct Plan - Growth Money Market Fund | 5.52% | 5.04% | 6.26% | 7.19% |
| Invesco India Money Market Fund - Direct Plan - Growth Money Market Fund | 5.05% | 4.68% | 5.86% | 7.19% |
| ICICI Prudential Money Market Fund - Direct Plan - Growth Money Market Fund | 5.39% | 4.94% | 6.18% | 7.14% |
| Tata Money Market Fund - Direct Plan - Growth Money Market Fund | 5.57% | 5.18% | 4.79% | 6.43% |
| Bandhan Money Manager Fund - Direct Plan - Growth Money Market Fund | 5.29% | 4.75% | 5.86% | 7.08% |
| Kotak Money Market Fund - Direct Plan - Growth Money Market Fund | 5.42% | 4.92% | 6.10% | 7.10% |
(Source: Moneycontrol)
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