IDFC Mutual Fund has launched its Overnight Fund. The NFO will begin on 16th Jan 2019 and end on 17th Jan 2019. Overnight Funds are debt funds which invest in debt securities held overnight only. Among debt funds, they are the shortest maturity product available. These funds are gradually emerging as an alternative to the popular liquid fund category, especially for individuals and companies who want to invest their money for very short periods of time. IDFC Overnight Fund is an open ended fund and it will reopen for subscription on 21st January, 2019.
IDFC Overnight Fund can only invest in debt and money market securities with residual maturity of 1 day. This keeps both interest rate risk and credit risk to a bare minimum. IDFC Overnight Fund will be benchmarked to the Nifty 1D Rate index. The returns of this index over the past 1 year and 5 years were as follows:
| Time Period | 1 year | 5 years |
| Returns | 6.18% | 6.91% |
Source: NSE Factsheet, Data as on 31st December 2018
Harshal Joshi will be the fund manager of IDFC Overnight Fund. He has been associated with IDFC AMC since December 2008. He jointly/individually manages several IDFC Debt Funds including IDFC Money Manager Fund, IDFC Cash Fund, IDFC All Seasons Bond Fund, IDFC Government Securities – Constant Maturity Fund etc and the debt portions of IDFC Arbitrage Fund and IDFC Equity Savings Fund.
Taxation of IDFC Overnight Fund
IDFC Overnight Fund will be taxed as a debt fund. If held for less than 3 years, it will be taxed at your slab rate. If held for more than 3 years, it will be taxed at 20%. However investors will be given the benefit of indexation. Indexation reduces the tax burden on the investor to account for inflation.
Key Details of IDFC Overnight Fund NFO
Minimum Subscription: Rs 5,000
Minimum SIP Subscription: Rs 1,000
NFO Period: 16th-17 January 2019
Exit Load: None
Benchmark: Nifty 1D Rate Index
Fund Manager: Harshal Joshi
Date of Reopening: 21st January 2019