Monarch Mutual Fund set to enter MF space with maiden overnight fund; files draft with Sebi

Monarch Mutual Fund, a venture of Monarch Networth Capital, is set to launch its first mutual fund product - an overnight fund. The company received in-principle approval from the Securities and Exchange Board of India (Sebi) earlier this year to commence mutual fund operations in India. The overnight fund, which will be open-ended and debt-oriented, will primarily invest in overnight securities with a maturity of one business day. The fund aims to generate returns with low risk and high liquidity.

Managed by Sanjay Motta, the minimum investment amount for lumpsum investments is Rs 5,000, while for Systematic Investment Plans (SIPs) it is Rs 1,000, both in multiples of Re 1. The fund can invest up to 100% in debt and money market instruments maturing on or before the next business day. Overnight funds are allowed to hold up to 5% of their net assets in government securities (G-secs) and/or Treasury bills (T-bills) with a residual maturity of up to 30 days for collateral purposes.

The portfolio will be rebalanced periodically to maintain the desired asset allocation pattern, with deviations from the plan possible in case of short-term defensive considerations. Such deviations will be adjusted back to the normal asset allocation within seven days. The fund's performance will be benchmarked against the CRISIL Liquid Overnight Index.

Investors seeking regular short-term income, with a low-risk appetite, will find this fund suitable. The principal amount invested in the fund and the benchmark share a similar low-risk profile according to the fund's riskometer.