New launch: DWS Banking and PSU Debt Fund

DWS Banking and PSU Debtfund is an open ended income fund which will invest in money market and debt instruments issued by banks and public sector companies. The fund is currently open for subscription and closes on March 8. The minimum amount of investment is Rs 5,000. There is no entry load, while there is an exit load of 1% if it is redeemed before 1 year from date of allotment. The fund will be managed by Nitish Gupta.

Investment Strategy of the Scheme

The scheme will invest in debt securities that yield relative value over others for similar risk and liquidity level. The scheme will invest in rated debt instruments which will be of investment grade as rated by a credit rating agency. The fund would appease to investors investing in bankdeposits and public sector companies. "Investors find comfort in bank deposits and PSUs. It will appeal to investors as mutual funds are more tax effective than banks, " says Anup Bhaiya, MD and CEO, Money Honey Financial Services.

Why to invest: The scheme has a low risk profile. Debtfunds are tax efficient when it comes to fixed deposits.

Why not invest: There are other available schemes with a long standing past track record