JioBlackRock Overnight Fund opens for subscription. Who should invest?

Jio BlackRock Mutual Fund has launched - JioBlackRock Overnight Fund, and the NFO of the fund is open for subscription and will close on July 2. The investment objective of the scheme is to generate regular income through investment in a portfolio comprising debt and money market instruments with overnight maturity.

The fund is an open-ended debt scheme investing in overnight securities with a relatively low interest rate risk and relatively low credit risk.

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This overnight fund is suitable for investors' regular income over a short term who may be in line with overnight call rates and want investment in debt and money market instruments with overnight maturity.

The scheme will be benchmarked against the Nifty 1D Rate Index and will be managed by Arun Ramachandran, Vikrant Mehta, and Siddharth Deb.

The fund will allocate 0-100% in overnight securities or debt and money market instruments maturing on or before the next business day. The total assets of the scheme will be invested in debt securities and money market instruments maturing on or before the next business day. In case of securities with put and call options (daily or otherwise) the residual maturity (deemed or actual) shall be on or before the next business day.

The scheme will offer only direct plans, and the plan shall offer only growth options. The minimum application amount for lumpsum investment is Rs 500 and any amount thereafter.

The minimum amount for weekly, monthly, and quarterly Systematic Investment Plan (SIP) is Rs 500 and in multiples of Re 1 thereafter with a minimum of six installments. The exit load is nil on this overnight fund. The maximum total expenses ratio (TER) permissible under Regulation 52 (6) (c) is up to 2%.

The principal invested in the scheme will carry low risk, as indicated by the scheme’s riskometer.

Who can invest?

According to the Scheme Information Document (SID) of the overnight fund, the following persons are eligible and may apply for subscription to the units of the scheme - Resident Indian adult individual either singly or jointly (not exceeding three), minor through parent/lawful guardian, companies, bodies corporate, public sector undertakings, association of persons or bodies of individuals and societies registered under the Societies Registration Act, 1860 (so long as the subscription of units is permitted under their respective constitutions), religious and charitable trusts under the provisions of Section 11(5)(xii) of the Income Tax Act, 1961 read with Rule 17C of Income-tax Rules, 1962.

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The others that are eligible for investment includes trustees of private trusts authorised to invest in mutual fund schemes under their trust deeds, Partnership Firms, Proprietorship in the name of the sole proprietor, Banks and Financial Institutions, Non-resident Indians (NRI)/Persons of Indian Origin (PIO) / Overseas Citizen of India (OCI) residing abroad on full repatriation basis or on non-repatriation basis, Army, Air Force, Navy and other para-military funds, Scientific and Industrial Research Organizations, Other Mutual Funds registered with SEBI.

And lastly, Foreign Portfolio Investors subject to the applicable regulations, International Multilateral Agencies approved by the Government of India, Universities and Educational Institutions, and any other category of investor, so long as, wherever applicable, they are in conformity with applicable SEBI Regulations/RBI, etc.

According to a release by ICRA, the provisional rating assigned to all three funds is [ICRA]A1+mfs.

The provisional rating for the JioBlackRock Overnight Fund will be finalised upon the launch of the scheme, and analysis of the credit score of the scheme for at least three months, post launch, and its meeting the benchmark score for the assigned rating, the ICRA release said.

According to the Sebi mandate, overnight funds make investments in overnight securities having a maturity of 1 day.

Overnight funds are ideal for investors who need a very safe place to park their money for just a few days. These funds invest in instruments with a one-day maturity and carry minimal risk. They are well-suited for highly conservative investors, corporates, or individuals who want instant liquidity without exposing their money to market volatility.

Also Read | JioBlackRock Liquid Fund NFO to open on June 30. A safe bet for regular income?

In addition to the JioBlackRock Overnight Fund, the fund house has also launched a liquid fund and a money market fund as well. The new fund offer (NFO) of money market fund and liquid fund are open for subscription and will close on July 2.

ICRA has assigned [ICRA]A1+mfs rating to the JioBlackRock Money Market Fund and the JioBlackRock Liquid Fund as well.