Indiabulls has launched yet another\nopen-ended debt scheme, Indiabulls Overnight Fund. <\/p>\n\n\n\n
An Overnight fund is a category of debt scheme emerged after the SEBI\u2019s recategorization norms<\/a>.<\/p>\n\n\n\n It has the shortest\ninvestment duration of one day and provides better returns than bank FDs and\nare more liquid. The interest rate risk involved\ntherein is least or almost zero. However, there can be a reinvestment risk,\ni.e. overnight funds may not be able to reinvest their proceeds at the same\nrate of return, but at least that doesn’t cause any capital erosion.<\/p>\n\n\n\n On the risk-return spectrum, overnight funds are placed at the lower end of the spectrum that carries the least amount of investment risk.<\/p>\n\n\n\n [Read: <\/strong> Why Comparing Returns to Risk Is More Meaningful!<\/a>]<\/p>\n\n\n\n Graph:\nIndicative Risk Return Matrix -Debt Categories<\/em><\/strong><\/p>\n\n\n\n \n(Source:\nPersonalFN Research)<\/p>\n\n\n\n Since the debacle of IL&FS last<\/a> September onwards, several other companies<\/a> have been scrutinised and suffered a similar fate. This has pushed liquid funds<\/a> and debt funds category under severe stress and distressed the investors. <\/p>\n\n\n\n [Read<\/strong>: Can You Ignore Default And Liquidity Risk While Investing In Debt Mutual Funds?<\/a>]<\/p>\n\n\n\n Besides even the data released by AMFI for the month of May shows that there were a lesser number of inflows in debt funds of Rs 48,572 crore for the month of May 2019 as compared to April 2019 inflows of Rs 101,971 crore. From this, it is quite evident that investors have become more conservative<\/a> and vying for options that are less risky. And the overnight fund is a plausible choice for the shortest duration of one day. <\/p>\n\n\n\n Several fund houses have been rapidly launching overnight funds in the market as they saw this as an opportunity to win back investors\u2019 confidence with respect to debt fund investments. Hence, even the Indiabulls Mutual Fund joined its peers with its Overnight Fund. <\/p>\n\n\n\n Table 1: Details of Indiabulls Overnight Fund<\/em><\/strong><\/p>\n\n\n\n
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