Tata Floating Rate Fund - NFO closes on 5 July 2021

Tata Floating Rate Fund - NFO closes on 5 July 2021
The Tata Floating Rate Fund is a debt scheme that primarily invests in floating rate instruments. The NFO will go live on Monday and closes on 5 July. We bring you all the details.
**Good to knowFloating rate instrumentsThese are debt instruments that pay variable or floating interest to its investors. These interest rates (also called as coupon rates) are adjusted or changed periodically—for instance, three or six months. Coupon rates on these debt instruments are based on various factors such as benchmark reference rates, credit rating of an issuer and the interest rate environment. The advantage of having floating rates is that it provides an opportunity to gain from a rising rate scenario. What is a benchmark reference rate? Interest rates of various financial instruments are pegged against the benchmark reference rates. In India, there are benchmark reference rates such as repo and MIBOR (Mumbai Interbank Offered Rate).
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Investment objective
The fund aims to provide competitive and stable returns by adjusting to the evolving interest rate scenario. It will adopt a moderate risk strategy by investing in good quality (rated AA+/
  • or equivalent and above) floating-rate debt. The fund will also manage risk by having different tenures or duration papers.
Most importantly, with the inflation continuing to rise and economic activity gradually rebounding, Tata Floating Rate Fund is offering a debt portfolio for the upcoming rate cycle. If the Indian central bank decides to hike rates, the floating rate fund has the traits to take advantage of it.
In such a scenario, having coupon rates aligned with the changing interest scenario is extremely pivotal for investors. The fund provides much needed flexibility and diversity with respect to the interest-rate cycle.
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Asset allocation
| Instrument | Allocation (% of total assets) | | Risk profile |
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    | Instrument | Minimum | Maximum | Risk profile |
    | Floating Rate instruments (including fixed-rate instruments converted to floating rate exposures using swaps/derivatives) | 65 | 100 | Low to medium |
    | Fixed rate debt securities, securitized debt, money market instruments | 0 | 35 | Low to medium |
    | Units issued by REITs & InvITs | 0 | 10 | Medium to high |
Scheme details
| Name | Tata Floating Rate Fund |
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    | Type | An open-ended debt scheme investing predominantly in floating rate instruments (including fixed rate instruments converted to floating rate exposures using swaps/ derivatives) |
    | Category | Debt floater fund |
    | Investment objective | The objective of the scheme is to generate income through investment primarily in floating rate debt instruments, fixed rate debt instruments swapped for floating rate returns and money market instruments. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. The scheme does not assure or guarantee any returns. |
    | Benchmark | CRISIL Ultra Short Term Debt Index |
    | Load Structure | Entry Load (During the NFO): NA Exit Load: Nil |
    | Fund manager | Akhil Mittal |
    | Options | Regular and Direct |
    | Minimum application amount (during NFO) | ₹5,000 and in multiples of ₹1 thereafter |
    | Additional application amount | ₹1,000 and in multiples of ₹1 thereafter |
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| This product is suitable for investors who are seeking*: | Riskometer |
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    | Regular Income by investing predominantly in a portfolio of floating rate instruments (including fixed rate instruments converted for floating rate exposures using swaps / derivatives) | |
*Investors should consult their financial advisors if in doubt about whether the product is suitable for them.
**Note: The above information has been sourced from the Scheme Information Document provided by Tata Asset Management Company Limited. To read the entire document, click ** here**. Disclaimer RKSV Securities India Private Limited (ARN/Distributor
  • 107930; brand name Upstox) is the distributor of the mutual fund. Please consult your investment advisor before investing.Mutual fund investments are subject to market risks, read all scheme related documents carefully.**