JioBlackRock Income Plus Arbitrage Omni FOF: 7 things investors should know

JioBlackRock Mutual Fund has filed draft papers with the Securities and Exchange Board of India (SEBI) for the proposed JioBlackRock Income Plus Arbitrage Omni FOF, according to the Scheme Information Document.

The proposed scheme will be an open-ended Fund of Fund that will invest in units of active/passive debt-oriented funds and arbitrage funds.

The scheme’s investment objective is to generate income by investing in active/passive debt-oriented funds and arbitrage funds. The document states that there is no assurance that the investment objective of the scheme will be achieved.

1. How will the scheme invest?

Under normal circumstances, 95% to 100% of the scheme’s total assets will be invested in units of mutual fund schemes.

2. Within this allocation:

35% to 65% will be invested in units of actively/passively managed debt-oriented funds.

35% to 65% will be invested in units of actively/passively managed arbitrage funds.

0% to 5% may be invested in debt and money-market instruments.

The scheme may invest in debt-oriented schemes and arbitrage schemes of JioBlackRock Mutual Fund as well as schemes of other mutual fund houses having similar objectives, strategy, asset allocation and other attributes, as found suitable by the Fund Manager.

3. Benchmark

The proposed scheme will use a composite benchmark comprising 60% NIFTY Composite Debt Index and 40% Nifty 50 Arbitrage Index (TRI).

According to the draft document, the composition of the benchmark is in line with the intended asset allocation and investment objective of the scheme.

4. Minimum investment

The draft papers specify a minimum lump-sum investment of ₹500 during the NFO and on an ongoing basis.

The minimum SIP amount will also be ₹500. The minimum additional purchase amount is ₹500.

5. No exit load

The scheme will have no exit load, according to the draft document.

6. Other facilities for investors

The proposed scheme will offer facilities including SIP top-up, SIP pause, Systematic Transfer Plan (STP) and Systematic Withdrawal Plan (SWP), subject to the terms specified in the Scheme Information Document.

Under the SWP facility, investors can withdraw a specified sum periodically from their investments, with the remaining corpus continuing to be invested in the scheme.

7. Fund of Fund structure

The proposed scheme will primarily invest in units of other mutual fund schemes.

Its portfolio will comprise active/passive debt-oriented funds and arbitrage funds. The scheme can invest in eligible schemes of JioBlackRock Mutual Fund as well as other mutual fund houses.

The draft also provides for a Model Portfolios Facility, a digital-only offering that provides investors with pre-constructed model portfolios comprising combinations of existing JioBlackRock Mutual Fund schemes. Inclusion of the scheme in this facility will be at the sole discretion of the AMC.

The scheme is proposed for investors seeking income over a short to medium-term investment horizon and investment in units of active/passive debt-oriented funds and arbitrage funds.

Disclaimer: This article is written purely for informational purposes and should not be considered investment advice from Upstox. Securities mentioned are illustrative and not recommendations. Investors should do their own research or consult a registered financial advisor before making investment decisions.