DHFL Pramerica Mutual Fund merges schemes, creates side pockets in FMPs

DHFL Pramerica Mutual Fund has decided to merge four of its debt mutual fund schemes. According to a notice released by the fund house, DHFL Pramerica Floating Rate Fund will be merged with DHFL Pramerica Ultra Short Term Fund and DHFL Pramerica Medium Term Fund will be merged with DHFL Pramerica Credit Risk Fund. The notice also said that the fund house will create side-pockets or segregated portfolios in two of its FMPs.

The fund house said in the notice that the decision was taken to simplify and rationalize the fund offerings. “Please note that post the proposed merger of transferor Schemes/Plans/Options with the transferee Schemes/Plans/Options, on and from the Effective Date, the transferee Schemes/Plans/Options will be the surviving schemes and the investment objective, investment pattern, annual recurring expense structure and all the other provisions of the transferee Schemes/Plans/Options as contained in the Scheme Information Document and Key Information Memorandum on completion of merger will be effective for the unit holders of the transferor Schemes/Plans/ Options. It may be noted that there are no other changes in the schemes,” the fund house said in the notice.

The fund house also announced the creation of segregated portfolio in case of a credit event in DHFL Pramerica Fixed Duration Fund - Series AH and DHFL Pramerica Fixed Duration Fund - Series AP. “A segregated portfolio may be created in a mutual fund scheme in case of a credit event at issuer level. That is, downgrade in credit rating by a SEBI registered Credit Rating Agency (CRA),” the fund said.


As the merger amounts to fundamental changes in the schemes, the fund house has given investors an exit option. Investors can choose to exit from the merging schemes without paying any exit load till June 22. All transaction requests received after June 22 will be subject to exit load, the fund house said.