ITI Launches Dynamic Bond Fund NFO – Should you Subscribe?

ITI Dynamic Bond Fund NFO - Dates, Reasons to invest, Risks factors, Review and AnalysisITI Launches Dynamic Bond Fund NFO – Should you Subscribe?

ITI mutual fund is coming up with Dynamic Bond Fund NFO, which would open for subscription on 25th June 2021. Dynamic Bond Funds are mutual funds that invests across various duration / tenure of instruments. If you an investor who is looking for all season’s debt fund, dynamic bond funds could be ideal one for you. In this article we would provide ITI Dynamic Bond Fund NFO issue details and various risk factors associated with such funds.

Also Read: 10 Thematic Mutual Funds – Upto 1,600% returns

ITI Dynamic Bond Fund – NFO Issue Details

ITI Dynamic Bond Fund NFO opens on Friday 25th June 2021 and closes on Friday 9th July 2021. This is an open-ended equity mutual fund scheme.

Scheme Opens 25-Jun-21
Scheme Closes 09-Jul-21
Scheme reopens for continuous purchase/sale On or before 23-Jul-21
Minimum Lumpsum Rs 5,000
Minimum SIP Rs 1,000 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load Nil
Risk Moderate Risk
Max expense Ratio (TER) 2.00%
Benchmark CRISIL Dynamic Debt Index

ITI Dynamic Bond Fund NFO SID

What is the investment objective of this MF scheme?

The investment objective of the Scheme is to maximize returns through an active management of a portfolio comprising of debt and money market instruments.

There is no assurance or guarantee that the investment objective of the scheme will be realized.

What is the allocation pattern in this mutual fund?

This fund investment pattern is as follows:

Type of instruments Min % Max % Risk Profile
Debt and Money Market Instruments
across duration
0% 100% Low to Medium
Units issued by REITs and InvITs 0% 10% Medium to High

Why to invest in the ITI Dynamic Bond Fund?

Here are a few reasons to invest in such debt funds.

1) This Dynamic Bond Fund would invest in securities that matures across various durations. You might be a short-term investor or medium-term investor or long-term investor. But investing in this fund is like investing in all season’s debt fund.

2) Dynamic Bond Funds have historically provided 7% to 10% annualized returns in the last 3-10 years though not guaranteed. If you are looking for returns higher than bank FDs, one can invest in such funds.

Some key risk factors you should consider before you invest in such funds

One should consider some of these risk factors / negative factors before investing.

1) This fund invests in debt instruments across tenures. Such debt instruments carry different levels of risks. Scheme risks might increase or decrease depending on the investment pattern.

2) This fund invests in debt instruments which has interest rate risks, re-investment risk, spread risk, liquidity risk, credit risk, default risks, etc.,

3) This scheme invests in fixed income derivatives where there is element of risk.

4) You can refer complete risk factors of investing in this scheme in SID / KIM.

Performance of existing Dynamic Bond Funds in India

Here is the performance of existing Dynamic Bond Funds in the last 3 to 10 years. Returns are annualised.

Fund Name 3 Yrs 5 Yrs 10 Yrs
ICICI Prudential All Seasons Bond Fund 9.5% 9.2% 10.1%
Kotak Dynamic Bond Fund 9.8% 8.9% 9.1%
Axis Dynamic Bond Fund 10.1% 8.6% 8.7%
IDFC Dynamic Bond Fund 10.0% 8.6% 9.1%
SBI Dynamic Bond Fund 9.3% 8.3% 8.8%
Quantum Dynamic Bond Fund 8.6% 8.3% NA
PGIM India Dynamic Bond Fund 8.7% 8.2% NA
DSP Strategic Bond Fund 9.6% 7.9% 8.6%
L&T Flexi Bond Fund 8.3% 7.7% 8.5%
Nippon India Dynamic Bond Fund 8.5% 7.5% 8.5%

You may also like: Top Performing Mutual Funds in last 15 years

Should you invest in ITI Dynamic Bond Fund NFO?

ITI Dynamic Bond Fund (New Fund Offer) would invest in debt instruments across various durations. This is like all season debt fund. It invests in corporate debt instruments, fixed income derivatives etc., which are high risk. Dynamic bond funds would invest across durations and ideal for investors who want to invest for medium to long term. Moderate risk investors can invest in this fund for medium to long term of say 3 to 10 years.

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Suresh KP


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