Aditya Birla Sun Life Mutual Fund has collected about ₹200 crore through its new fund offer of US Treasury Bond ETFs Fund of Funds. The NFO closed on October.
Aditya Birla Sun Life US Treasury 1-3 Year Bond ETFs Fund of Funds is suitable for investors with shorter investment horizon and who have a higher risk profile. The benefits of investing in these instruments include locking in multi-decade high yields for long-term, adding duration to portfolio and an opportunity to earn capital gains.
Notably, when investing through Indian mutual fund schemes, the exposure is not treated as an overseas investment under the Liberalised Remittance Scheme and there is no limit to investment value along with non-applicability of Tax Collected at Source that makes this a compelling investment option. It also protects against rupee depreciation and provides geographical diversification.
Per the current regulatory provisions, mutual funds can make overseas investments in Exchange Traded Funds subject to a maximum of $300 million per MF, within the overall industry limit of $1 billion.
A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC, said almost 7,000 investors have capitalised on this unique opportunity and invested in the US Treasury Bond ETFs Fund of Funds NFO.
The US Federal Reserve is unlikely to hike rates going forward and any increase in yields should be looked upon as an opportunity to buy US treasuries as rate cuts to start from end of next year or early 2025, he added.
The new passive offering is a tactical opportunity to diversify ones investments in US denominated assets, he said.