ITI Mutual Fund launches NFO for dynamic bond fund


ITI Mutual Fund on Friday launched a new fund offer (NFO) for a dynamic bond fund, which will invest in debt and money market instruments. The NFO will close on 9 July and the bond fund will be benchmarked against Crisil Dynamic Debt Index.

This is the 13th fund launch by the fund house, which started operations in April 2019.

The objective of the fund is to maximize returns through the active management of portfolios comprising debt and money market instruments. The fund will follow a strategy that is structured in a manner that offers investors the benefit of dynamic fund management through flexible asset allocation and active duration management.


Dynamic bond funds are ideal for investors who may find it difficult to judge the interest rate movement. These bond funds help investors minimize interest rate risk as they offer flexibility to alter the portfolio maturity according to the interest rate scenario.

“With ITI Dynamic Bond Fund, we seek to address the needs of investors who are looking for an all-season product which aims to provide steady returns by investing in debt and money market instruments,” said George Heber Joseph, chief executive officer and chief investment officer, ITI Mutual Fund.

According to the fund house, the majority of investments will be in AAA or A1+ or equivalent rated securities. The scheme will be managed by Vikrant Mehta.


The minimum application amount for the NFO is 5,000, and in the multiples of 1, thereafter. There will be nil entry or exit load to the scheme. There are already more than 20 dynamic bond funds available in the market, and over the past year, these funds have delivered an average return of 4.77%, while three-year returns stand at 7.63%, 5-year at 7.14% and 10-year at 8.30%.

Compared with this, State Bank of India’s fixed deposits (FDs) have delivered a return of 5.1% over the past year, 6.7% on a three-year basis, 7% on a five-year basis and 8.75% on a 10-year basis.

However, returns from FDs are taxed as per investor’s slab rates, while short-term capital gains (up to three years) from debt schemes are taxed as per slab rates, long-term capital gains (after three years) are taxed at 20% with indexation benefit.


Investors should keep in mind that compared with FDs, which are understood to have low risk, dynamic bond funds come with moderate risk.

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