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Mumbai, Maharashtra, India
Fidelity Fund Management Private Limited today announced its plans to launch a fixed income business in India. Fidelity has already established a fixed income fund management capability within its Mumbai investment operation and has now provided details of its first Indian fixed income product. Fidelity, which manages three equity funds and a multi manager cash fund, will launch the Fidelity Short Term Income Fund on 17 August.
Announcing the launch, Ashu Suyash, Managing Director and Country Head, Fidelity Fund Management Private Limited, said: "All investors should consider spreading their investments across several different classes of asset in order to provide the right balance of risk and reward. The core asset classes are equities, fixed income and cash. I am delighted that, through the launch of the Short Term Income Fund, we will be able to offer all three asset classes to Indian investors. Our fixed income investment process places the same strong emphasis on research that we apply to equity investment. Fixed income assets are a good diversifier of equity market risk and should find a place in investors' portfolios as they look to build balanced portfolios."
Andrew D. Wells, Chief Investment Officer, Asian Fixed Income, Fidelity International, said: "We recognised at the outset when we established our equities team in Mumbai, that it would be important to offer investors a wide range of investment solutions. With the enthusiastic response to our equity funds, we are keen to meet investor demand for high quality fixed income products. As with equities, we have a global network of investment professionals dedicated to the fixed income discipline. Investors will benefit from the Fidelity approach to managing fixed income assets which is unique in the Indian market."
Fidelity's approach to fixed income investing has two pillars - people and process. Fund managers follow a multi-strategy approach that spans asset allocation, yield curve positioning, interest rate expectations, sector allocation, issuer credit analysis and security valuation. To build and manage multi strategy portfolios successfully, Fidelity follows an integrated team approach. This means combining the specialist expertise of the fund manager, credit researchers, quantitative analysts and traders.
Fidelity's fixed income team in India reflects this structure. Sameer Kulkarni is Fund Manager - Fixed Income, Fidelity Fund Management Private Limited, and he is supported by a team of two credit analysts and a trader.
Fidelity's first fixed income product in India will be the Fidelity Short Term Income Fund, which is an open ended income scheme that aims to generate reasonable returns through a diversified portfolio of fixed income securities.
Speaking about the Fund, Sameer Kulkarni said: "Short term income funds provide a great alternative to volatile equity markets such as the one we are seeing now. The Fidelity Short Term Income Fund will play into the current steepness of the yield curve from a risk-return perspective. In managing the Fund, we will use the multi strategy, integrated team approach to create a diversified portfolio. Our multi strategy approach balances the many factors that affect bond prices and our portfolios actively exploit the opportunities we find, but do so through a number of lowly-correlated positions."
Ashu Suyash added: "The product is beneficial to investors as it offers the opportunity to earn reasonable returns over shorter periods of time even as their overall portfolio works towards creating wealth over the long term."
The Fidelity Short Term Income Fund NFO will be open from August 17 to 24. The Fund will have an Institutional and Non-Institutional Plan and each Plan will offer Growth and Dividend options. The Fund will have no entry or exit loads.
Fidelity Fund Management Private Limited is the Indian arm of Fidelity International Limited. Fidelity International Limited has offices in over 20 countries across Europe and Asia-Pacific. Fidelity International along with its US affiliate, Fidelity Management and Research Co., actively covers 95% of world market capitalisation. Central to Fidelity's success is a pioneering spirit, a commitment to innovation that sets new industry standards and an unmatched investment in research, talent and technology. Driven by an entrepreneurial culture, Fidelity is known to actively pursue investor education and distributor training.
CI00398
Scheme Classification: An open ended income scheme. Investment Objective: To generate reasonable returns through a diversified portfolio of fixed income securities. ▪Normal Asset Allocation: Debt Instruments including securitized debt: 0 - 100%, money market instruments: 0 - 100% ▪ Terms of issue: Units of Rs. 10 per Unit for cash during the New Fund Offer and at Applicable NAV thereafter. Minimum initial application amount:- Institutional Plan - Rs. 5,00,00,000 per application and Non-Institutional Plan - Rs. 5,000 per application. Minimum additional application amount: - Institutional Plan - Rs. 1,00,000 per application and Non-Institutional Plan - Rs. 1,000 per application. Minimum redemption amount/units :- Institutional Plan - Rs. 1,00,000/10,000 units and Non-Institutional Plan - Rs. 1,000/100 Units. Offer Document, Key Information Memorandum and Application Forms / Transaction Slips available at the ISCs/distributors' offices. General Services: Investors can contact any of the ISCs at its toll-free number "1-800-180 8000". NAVs will be calculated on all calendar days and published in two daily newspapers on all Business Days. Purchase/Redemption on all Business Days. ▪ Loads-Entry: NIL; Exit: NIL.
Risk factors: ▪ The AMC has no previous experience in managing a fixed income scheme and this is the first fixed income scheme launched by the AMC. ▪Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the Scheme or that the Scheme's objectives will be achieved. ▪As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets. ▪Past performance of the Sponsor/the AMC/the Mutual Fund does not indicate the future performance of the Scheme. ▪Fidelity Short Term Income Fund is the name of the Scheme, and this does not in any manner indicate the quality of the Scheme, its future prospects or returns. ▪In addition to the factors that affect the values of securities, the NAV of Units of the Scheme will fluctuate with the movement in the broader fixed income, money market and derivatives market and may be influenced by factors influencing such markets in general including but not limited to economic conditions, changes in interest rates, price and volume volatility in the bond and stock markets, changes in taxation, currency exchange rates, foreign investments, political, economic or other developments and closure of the stock exchanges. ▪Investments in different types of securities are subject to different levels and kinds of risk. Accordingly, the Schemes' risk may increase or decrease depending upon its investment pattern. E.g. investments in corporate bonds carry a higher level of risk than investments in Government securities. Further, even among corporate bonds, bonds which have a higher rating are comparatively less risky than bonds which have a lower rating. Please read the Offer Document before investing.
Statutory: Fidelity Mutual Fund ('the Fund') has been established as a trust under the Indian Trusts Act, 1882, by Fidelity International Investment Advisors (liability restricted to Rs. 1 Lakh). Fidelity Trustee Company Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the Trustee to the Fund. Fidelity Fund Management Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the Investment Manager to the Fund.
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Anjali Patil, Fidelity Fund Management Pvt. Ltd., +91 (022) 6655 4015 anjali.patil@fidelity.co.in
Sandesh Advani, IPAN, +91 (022) 2266 1755 sandesh.advani@ipan.com
Source: Fidelity International (Business Wire India)
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