Union Gilt Fund NFO Review

Sannihitha Ponaka •

Updated on 13 Oct, 2023

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Union Mutual Fund to launch a new NFO in the gilt fund category : Union Gilt Fund NFO

Union Mutual Fund is launching a Gilt Fund, Union Gilt Fund, that invests in government securities across maturities.

The New Fund Offer (NFO) period for the Union Gilt Fund is from July 18^th 2022 to August 1^st 2022. The scheme re-opens for subscription on August 17th 2022.

Objective

The Union Gilt Fund aims to generate income through investing in a portfolio that comprises of government securities of various maturities. However, there is no assurance that the scheme’s investment objective will be achieved.

Fund Details

Union Gilt Fund	Details
NFO Opening Date	July 18^th 2022
NFO Closing Date	August 1^st 2022
Re-open Date	August 17^th 2022
Type of Fund	Open-ended debt scheme
Fund Manager	Mr Parijat Agrawal
Minimum Investment Amount	INR 1,000
Minimum Additional Purchase Amount	INR 1,000
Exit Load	Nil
Suitability	Moderate
Benchmark	CRISIL Dynamic Gilt Index
Plans and Options	Direct and Regular Plans, Growth and Income Distribution cum Capital Withdrawal (IDCW) Option

Who Can Invest?

Union Gilt Fund is an open-ended debt scheme that invests in government securities across different maturities. The securities have a relatively high-interest rate risk and relatively low credit risk. The Union Gilt Fund’s benchmark index is CRISIL Dynamic Gilt Index. Furthermore, the fund aims to generate credit risk-free returns over the medium to long term.

Since the Union Gilt fund invests across government securities in India, it is a moderate risk investment. Thus, it is primarily meant for investors seeking medium to long-term wealth creation.

Therefore, investors seeking exposure to government securities and are moderate risk-takers can look at this scheme. However, one must have a medium to long-term investment horizon (3+ years).

Popular Funds by Union Mutual Funds

Fund Manager

Mr Parijat Agrawal

Mr Parijat Agrawal has more than 26 years of industry experience. He is currently the Head – Fixed Income of Union Asset Management Company Private Limited. Prior to joining Union AMC, he was with SBI Mutual Fund, State Bank of Mauritius Limited, and SUN F&C Asset Management. Mr Agrawal holds a B.E. (Electronics & Communications) degree and also PGDM from IIM Bangalore.

Asset Allocation

Union Gilt Fund invests in government securities across different maturities. The following is the indicative asset allocation of the fund.

Types of Instruments	Indicative Allocation Minimum	Indicative Allocation Maximum	Risk Profile
Central and State Government securities, Treasury Bills and Cash Management Bills of Government of India	80%	100%	Sovereign
Cash, Money Market & Debt instruments	0%	20%	Low

Concluding Remarks

Union Gilt Fund invests across government securities with different maturities. The securities have a relatively high-interest rate risk and also low credit risk. Investments are made in sovereign-rated instruments (Government Securities), thus minimizing the credit risk in the portfolio.

The fund manager will seek to generate returns with minimal credit risk by investing in a portfolio comprising of securities issued and guaranteed by the Central and State governments and ensuring the securities are in line with the asset allocation pattern of the Scheme.

Thus, it is a moderate-risk investment option as per the riskometer. Investors must have a medium to long-term investment approach while considering Union Gilt Fund.

Investors who wish to invest in moderately risky funds and seek stable returns can consider the scheme. Furthermore, the scheme is primarily meant for investors looking for exposure to debt instruments like government securities. Since it is a pure debt scheme and invests in sovereign guaranteed securities, a medium to long-term investment horizon is necessary.

Frequently Asked Questions

How Can I Invest in the Union Gilt Fund NFO?

You can invest in the Union Gilt Fund NFO through any of the following methods:
Offline: By filling out the Union Gilt Fund NFO application and submitting it along with all documents and cheques to the nearest Investor Service Center of CAMS or Union mutual fund office.
Online:
1. Union Mutual Fund Website
2. Online FinTech platforms and mutual fund platforms
3. Through demat account
4. Through a mutual fund distributor or agent

When will the scheme open for ongoing subscriptions, switches and redemptions?

The index fund will re-open for subscriptions, switches and redemptions from the date August 17th 2022.

Is Union Gilt Fund risky?

The fund is classified as moderately-risky as per riskometer. Union Gilt Fund is a pure debt mutual fund that invests in government securities across different maturities. Since the securities have a relatively high-interest rate risk and low credit risk, the scheme doesn’t guarantee returns to investors. Therefore, investors who understand the risk associated with these government securities can consider the fund.

Is there a lock-in period for Union Gilt Fund?

No, Union Gilt Fund doesn’t have a lock-in period.