Reliance Mutual Fund has announced a new fund offering (NFO) for the Reliance Overnight Fund, with NFO duration of one day: December 17, 2018. This comes a month after the fund house filed draft documents with SEBI (Securities and Exchange Board of India). The open-ended debt scheme will mainly invest in overnight securities (maturity period of one day).
The overnight scheme will invest up to 100 percent of its assets in debt and money market instruments maturing on or before the next business day. This includes investment in MIBOR-linked instruments with call and put options. The scheme will not invest in securitized debt, short selling, credit default swaps.
Fund houses having been launching overnight schemes in the wake of the IL&FS defaults that caused liquid funds to face losses in September this year. Overnight funds are considered the safest due to their very short duration, which makes them least vulnerable to interest rate changes. Last month, ICICI Prudential launched an NFO for its overnight fund and fund houses like Indiabulls, Sundaram, Kotak, DSP filed for overnight funds with SEBI.
The performance of Reliance Overnight Fund will be benchmarked against the CRISIL Overnight Index. The benchmark index tracks performance of money market portfolio with 100 percent allocation to Triparty Repo Dealing System (TREPS), which recently replaced CBLO as the underlying asset tracked by the index.
| Index Name | 1-yr Returns (%) | 3-yr Returns (%) | 5-yr Returns (%) |
| CRISIL Overnight Index | 6.09 | 6.23 | 6.94 |
*Returns data as of Nov. 2018
The scheme will be managed by Anju Chhajer. Chhajer also manages short-term debt schemes like Reliance Low Duration Fund, Reliance Ultra Short Duration Fund, Reliance Prime Debt Fund. Reliance Ultra Short Duration Fund has one-year returns of 8.03 percent and Reliance Low Duration Fund has one-year returns of 7.23 percent. (As on Dec. 5, 2018)
Key information about the Reliance Overnight Fund NFO:
| NFO period | December 17, 2018 (one day only) |
| Minimum application amount | Rs. 5,000 |
| Exit load | NIL |
| Benchmark | CRISIL Overnight Index |
| Fund manager | Anju Chhajer |
Other Funds by Nippon India Asset Management
| Scheme Name | 3Y Returns (%) | AUM (Rs. Cr.) | Category |
| Nippon India US Equity Opportunities Fund | 20.3 | 13.52 | Sectoral/Thematic Fund |
| Nippon India Index Fund Sensex Plan | 13.69 | 6.34 | Large Cap Fund |
| Nippon India Index Fund Nifty Plan | 11.8 | 127.05 | Large Cap Fund |
| Nippon India Large Cap Fund | 10.83 | 9832.83 | Large Cap Fund |
| Nippon India Banking Fund | 10.59 | 2959.26 | Sectoral/Thematic Fund |
| Nippon India Growth Fund | 10.47 | 7177.4 | Mid Cap Fund |
| Nippon India Gold Savings Fund | 10.28 | 655.99 | Gold Funds |
| Nippon India Japan Equity Fund | 10.25 | 17.58 | Sectoral/Thematic Fund |
| Nippon India Gilt Securities Fund | 10.23 | 995.98 | Gilt Fund |
| Nippon India Gilt Securities Fund Direct Defined Maturity Date-Growth | 10.23 | 995.98 | Gilt Fund |
| Nippon India Value Fund | 10.13 | 3374.75 | Value Fund |
| Nippon India Small Cap Fund | 9.9 | 7207.07 | Small Cap Fund |
| Nippon India Multi Cap Fund | 9.87 | 10053.46 | Multi Cap Fund |
| Nippon India Balanced Advantage Fund | 9.74 | 88.21 | Dynamic Asset Allocation |
| Nippon India Income Fund | 8.83 | 435.23 | Medium to Long Duration Fund |
| Nippon India Quant Fund Retail | 8.65 | 28.37 | Sectoral/Thematic Fund |
| Nippon India Banking & PSU Debt Fund | 8.5 | 4111.1 | Banking and PSU Fund |
| Nippon IndiaRetirement Fund – Income Generation Scheme Direct-Growth | 8.27 | 212.64 | Conservative Hybrid Fund |
| Nippon India Short Term Fund | 7.91 | 12068.23 | Short Duration Fund |
| Nippon India Prime Debt Fund | 7.82 | 9100.28 | Corporate Bond Fund |
{Data as on Feb 19, 2020; Source: Value Research}