HDFC Overnight Fund
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About HDFC Overnight Fund
HDFC Overnight Fund is a debt mutual fund that invests in bonds that mature in one day. The fund functions such that at the start of each business day, the entire AUM would be in cash, overnight bonds would be purchased, they will mature the next business day, and the fund manager would take the cash and buy more overnight bonds and so on. NAV increases only incrementally due to the interest income.
Pros & Cons of HDFC Overnight Fund
HDFC Overnight Fund offers the following benefits: 1. This fund is beneficial for investors who want to park their money with the least amount of risk with decent returns. 2. Since the fund portfolio changes almost daily, the default risk is taken care of usually.
Certain drawbacks of HDFC Overnight Fund
- Below average returns have been observed in the last few quarters.
- They are a type of sub category of liquid funds, hence all drawbacks of liquid funds apply here as well.
Fund Information and Statistics of HDFC Overnight Fund
i) Inception / Launch date
HDFC Overnight Fund was launched on February 06, 2002 by HDFC Mutual Fund AMC.
ii) Risk level
Being an open ended liquid fund, this fund is a low risk bet and suitable for investors who have excess cash lying unused and think they might need it in a few days or months, you could consider parking it in this scheme.
Redemption of Units will be done by a repurchase/buyback by the fund house. Under normal circumstances, your fund house will dispatch as early as possible as per norms of SEBI.
iv) Fund Manager
Mr. Anil Bamboli has been the fund manager since July 2012.
v) Entry / Exit load
The fund doesn’t have any exit load associated with it.
Tax benefits of investing in the fund
Long term capital gains tax applies to returns on this fund. A capital gain registered during a period of less than 3 years is defined as Short-term Capital Gain (STCG). A capital gain registered over a period of 3 years or more is defined as Long-term Capital Gains (LTCG). STCG from debt oriented funds are added to the investor’s income. They are then taxed according to his income slab. Long term capital gains tax from debt funds is taxed at the rate of 20% after indexation and 10% without the benefit of indexation.
About HDFC Mutual Fund
HDFC Mutual fund is managed by HDFC Mutual Fund - one of the largest mutual funds and well-established fund house in the country with a consistent focus on delivering robust fund performance.
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Frequently Asked Questions
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All investments come with risk. Risk is the volatility or fluctuation in the price (and returns) of the investment. Usually,
- High Risk = High possible returns
- Low Risk = Stable, relatively lower returns