IDBI Mutual Fund, the asset management arm of IDBI, today said its Dynamic Bond

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Fund will attempt to encash the short-term interest rate volatility, offering conservative retail investors optimised return.

"It is a diversified, flexible and open-ended debt scheme. This fund will tap short term interest rate movement opportunities," IDBI AMC Managing Director & CEO Debasish Mallick said here today.

Stating that the fund attempted to take benefit of such opportunities, he said, there had to be a correction in short- term rates as yield on longer maturities were lower.

"The flexibility of the portfolio composition will generate optimum risk-adjusted returns making this scheme relevant under all market conditions."

Beside investing in government papers, the scheme will invest in other corporate instruments of both private and PSUs, but not below AA ratings, Mallick said.

The fund will benchmark the Crisil Composite Bond Fund Index. Under the current yield scenario investors could expect 9-9.5 per cent annual return from the fund.

The scheme had opened on January 31 and will stay open till February 14. Minimum investment is Rs 5,000 in the scheme.

Speaking about gold ETF fund, Mallick said it had received good response and mopped up Rs 110 crore.

The total asset under management by IDBI MF till December was Rs 6,100 crore.