LIC Mutual Fund files for money market fund with Sebi
Money Market Fund has a relatively low interest rate risk and moderate credit risk.
Asset management company LIC Mutual Fund has applied for Money Market Fund, an open-ended debt scheme investing in money market instruments. The scheme has a relatively low interest rate risk and moderate credit risk.
Money market mutual funds are used to manage short-term cash needs. Since they have an average maturity of one year, these are termed money market instruments.
Money market instruments include commercial papers, commercial bills, treasury bills, corporate bonds, government securities, state development loan (SDL) having an unexpired maturity up to one year, call or notice money, certificate of deposit, usance bills, Triparty Repo and any other like instruments as specified by the Reserve Bank of India from time to time.
The benchmark for the LIC MF Money Market Fund would be Nifty Money Market Index.
As per the scheme information document (SID), investments in derivatives can be up to 50% of the net assets of the Scheme. Investment in derivatives shall be for hedging, portfolio balancing and such other purposes as may be permitted from time to time.
As per the fund house, the scheme will not invest in American depositary receipt (ADR), global depositary receipt (GDR) or foreign securities. The scheme will also not engage in short selling and investing in unrated debt instruments.
The minimum subscription amount for each plan would be ₹5,000 and in the multiple of Re 1, thereafter.
In case of investors opting to switch into the scheme from existing schemes of LIC Mutual Fund during the new fund offer period, the minimum amount is ₹5,000 and in multiple of Re 1, thereafter.
SBI Savings Fund, Aditya Birla Sun Life Money Manager Fund and HDFC Money Market Fund are the biggest money market schemes in India with assets worth ₹24,757 crore, ₹16,480 crore and ₹13,273 crore, respectively.
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