HDFC Mutual Fund launches HDFC Long Duration Debt Fund.
HDFC Asset Management Company Limited (HDFC AMC), one of India’s leading mutual fund houses managing assets worth Rs 4.57 lakh crore as on December 2022 has announced the launch of HDFC Long Duration Debt Fund that plans to invest in long-dated government securities with roll down strategy. HDFC Long Duration Debt Fund is best suited as a core constituent of debt asset allocation for meeting long term goals of investors.
HDFC Long Duration Debt Fund is an open-ended debt scheme that aims to invest in debt instruments such that the Macaulay Duration of the portfolio is greater than 7 years. The Fund aims to provide hedge against long-term expected inflation and offer tax efficient regular cash flows through Systematic Withdraw Plan. With recent rise in interest rates, HDFC Long Duration Debt Fund also offers investors an opportunity to invest in the longer end of the yield curve and earn prevailing yields. The NFO opens on January 06, 2023 and closes on January 17, 2023.
Commenting on the launch, Mr. Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Company said, “At HDFC Mutual Fund, we believe in understanding the investor’s needs and aim to offer them easy and effective investment solutions. HDFC Long Duration Debt Fund provides investors an opportunity to invest in the longer end of the yield curve. Long Duration Debt can form an integral part of an investor’s asset allocation mix.”
The scheme will be managed by Mr. Shobhit Mehrotra, Head – Fixed Income, HDFC Asset Management Company who has over 30 years of experience in fund management and fixed income market.Commenting on HDFC Long Duration Debt Fund,Shobhit Mehrotra, said, “India is likely to see the highest growth over the next 5 years among all the major economies. Several structural growth drivers will support India’s growth story. The total debt to GDP remains lowest amongst the major global economies; thus, there is potential to grow by leveraging. With rate hikes of 225 bps during 2022, large part of curve flattening has already happened; yield movement at the longer end has been relatively small. Interest rates generally fall as countries move up the economic ladder. Hence, India offers conducive environment for long-duration debt.”
Long duration debt funds offer tax efficiency due to indexation (after 3 years). Investors may look at HDFC Long Duration Debt Fund as core constituent of debt asset allocation strategy for meeting long term goals.