Deutsche MF launches inflation-indexed bond fund
Jan 08 2014 , Mumbai
The new scheme, 'DWS Inflation-Indexed Bond Fund' is an open-ended debt fund and will open for subscription on January 16, and close on January 27.
"The new scheme will offer investors an opportunity to earn inflation-adjusted returns. While globally investors have seen benefits of inflation linked instruments, we believe these instruments are specially relevant for India, given the persistent high inflation level," Managing Director and Chief Executive Suresh Soni told reporters.
Inflation-indexed bonds are instruments where interest payment and principal are linked to whole sale price index (WPI) inflation and these bonds are currently available at an attractive yield of 3.6 per cent above WPI.
Government has been issuing IIBs on a monthly basis since June, 2013 and the current outstanding issuance stands at Rs 6,500 crore as of now.
As per the fund house, while around 72 per cent of the total corpus will be invested in IIBs, rest will be invested in other government securities.
Deutsche MF today also launched an offshore fund 'DWS Top Euro-land Offshore Fund', which will invest in European equities.
"The Euroland is one of our best performing global funds... A strong improvement in the macro data and uptick in manufacturing strengthens the recovery process there. We hope investors will take advantage of growth in this region and diversify their predominantly India- focused portfolios," senior product specialist for equities Fabian Frankenberg said.