Fidelity MF launches Fidelity Flexi Gilt Fund

Fidelity International's Indian asset management company announced the launch of its Fidelity Flexi Gilt Fund, an open ended gilt scheme that aims to generate sovereign linked returns primarily through investments in securities issued by the Central / State Government or any security unconditionally guaranteed by the Central / State Government. (View - New Fund Offers open NOW)

The NFO for the fund will be open from July 23 – 31, 2008 and thereafter it will open for ongoing purchases and redemptions from August 8, 2008.  The fund is benchmarked to the I-Sec Composite Gilt Index.

Ashu Suyash, Managing Director and Country Head – India, Fidelity International, said: "At a time when investors have turned risk averse and credit concerns abound, gilt funds can fill a critical gap in asset allocation. By definition, government securities carry no credit risk and investing in them through a gilt fund also gives investors the added benefits of liquidity and tax efficiency as compared to RBI bonds, PPF or other similar products."

Sameer Kulkarni, who is the fund manager for the Fidelity Flexi Gilt Fund, said, "In the current tough economic environment, there is a possibility of deterioration in corporate credit quality. Government debt, on the other hand, comes with a sovereign guarantee and there is no risk to capital or interest payments. Moreover, as economic growth comes under pressure, the softening of interest rates has historically been used to act as a stimulus. Investments in high yield government securities have the potential to benefit from such a scenario." 

The scheme offers Growth and Dividend options. The minimum initial investment is Rs 5000. The fund has no entry load, but an exit load of 0.50% will be applicable for redemptions within 6 months from the date of purchase, in case of purchase amount less than Rs 50,00,000 applying first in first out basis. A switch-out or a withdrawal under SWP or transfer under STP may also attract an exit load / CDSC like any redemption.

Investors can invest in the Fidelity Flexi Gilt Fund even through the SIP route with a minimum amount of Rs 500 per installment with the total of all installments not being less than Rs 5000. In addition, the systematic transfer and withdrawal plans are available as well.