UTI launches a new debt fund called the Long Duration Fund. Check out the fund details

UTI launches a new fund called the UTI Long Duration Fund

_ UTI MF launches a new debt fund

Mutual fund houses offer different types of funds to suit the varying risk profiles of investors. Moreover, they keep adding new funds to their product portfolio for diversification.

Recently, UTI mutual fund has unveiled a new debt fund for its investors, the UTI Long Duration Fund. The fund is an addition to the debt fund category and will be preferred by investors having a long-term investment horizon and low-risk appetite.

Here are the major details of the new fund.

UTI Long Duration Fund

The UTI Long Duration Fund has been launched through a New Fund Offer (NFO), which is available from 6th March to 15th March 2023. Other details of the fund are as follows –

  • It is an open-ended debt fund whose portfolio would comprise debt securities and money market instruments.
  • The Macaulay duration of the fund is 7 years.
  • The fund benchmark is CRISIL Long Duration Fund All Index
  • Given the long-term horizon, investors would face a high-interest rate risk. However, the credit risk would be low since the fund would invest in highly rated instruments.
  • Both direct and regular plan options are available. Moreover, you can choose the growth or dividend option depending on your investment needs.
  • The units would be available at their face value of Rs.10 during the NFO period. The minimum amount required to invest in the fund is Rs.5000. There’s no maximum limit.
  • The minimum SIP investment is Rs.500
  • There’s no entry load, and the exit load is variable depending on when you exit from the scheme.

Should you invest in UTI Long Duration Fund?

The UTI Long Duration Fund can be a suitable investment option if –

  • You are looking for a long-term investment avenue.
  • You want to avoid market-linked volatility risks and want stable returns on your investment.
  • You want to diversify your portfolio by adding a debt component.
  • You are looking to invest in debt-based instruments

Related - Read which is better - ultra-short, low or short duration funds

Tax implication of investing and redeeming UTI Long Duration Fund

Here are the tax implications of investment in and redemption of the UTI Long Duration fund –

  • The amount invested into the scheme, whether in a lump sum or through SIPs, would not qualify for any tax deduction. The amount would form a part of your taxable income.
  • Under the dividend option, the dividend earned from the scheme would be taxed in your hands at your income tax slab rates.
  • If you redeem your investment within 36 months, the returns earned will attract short-term capital gains tax. Such returns would be taxed at your income tax slab rates.
  • Redemption after the completion of 36 months attracts long-term capital gains tax on the returns. The returns would be taxed at 20%, and you would get the benefit of indexation.

So, understand the details of the UTI Long Duration Fund before you invest in it. If the fund matches your investment needs, you can invest in the scheme during the NFO period to get units at the base NAV. Also, understand the tax angle for efficient tax planning.

Related - Read why long duration funds are gaining popularity despite the repo rate hike


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