The Hindu Business Line : Benchmark MF unveils Split Capital Fund

"We believe that the fund will come in handy to those investors who are currently looking for options to invest in markets but are risk-averse due to the volatility of markets," said Mr Rajan Mehta, Executive Director, in a release.

The scheme distributes credit risk between two classes of units to deliver no-risk return to the investors.

An investor can either apply for the preferred (Class A) units only or capital (Class B) units only or both units from both classes.

The preferred units have been rated AAA (Ind) (SO) by rating firm Fitch, the release said.

The structure of the scheme is such that even in the worst-case scenario, principal investment by the investors of preferred (Class A) units is expected to remain secure.

Both the units will be listed and traded separately on the capital market segment of the NSE.

Subordinate or Class B units will be kept at a minimum of 20 per cent of total portfolio size.

This proportion is designed to ensure that the fixed-income component of the underlying portfolio matures to at least equal the principal sums invested by preferred holders.

The investment in equities will be done in a manner that the equity portfolio will mimic the S&P CNX Nifty index.

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