Canara Robecco mutual fund to launch Banking funds

Canara Robeco Mutual Fund has announced the launch of Canara Robeco Banking and PSU Debt Fund. The open-ended debt scheme would predominantly invest in debt instruments of banks, public sector undertakings (PSUs), public financial institutions (PFIs), and municipal bonds.

The new fund offer (NFO) will open for initial subscription on July 29, 2022, and close on August 12, 2022. After that, it would be open for subscription on an on-going basis, effective on or before August 29, 2022, according to a press release by the fund house.

Canara Robeco has said that the actively-managed scheme would invest in high grade assets, primarily AAA rated bonds of banks and PSUs. It would aim to manage duration and capture opportunities in the interest rate cycle and mispricing on the yield curve.

It said the risk associated with issuances by banks and PSUs are relatively lower because of the comprehensive regulatory framework for banks by the Reserve Bank of India (RBI) and the government ownership in case of PSUs and PFIs. The benchmark index of the fund is the CRISIL Banking and PSU Debt Index.

Avnish Jain, head, fixed income, and fund manager, Canara Robeco, said the fund would maintain high credit quality and liquidity in the portfolio through a three-pronged approach. It would contain risks by adhering to issuer and/or sector limits, track liquidity closely, as well as manage portfolio concentration and weighted average maturity, he said.