Invesco Mutual Fund Files Draft for Hybrid Arbitrage-Debt FoF

Invesco Mutual Fund has filed a draft Scheme Information Document for a new offering, Invesco India Income Plus Arbitrage Active Fund of Fund. This open-ended fund of fund scheme is to invest in a mix of actively managed debt-oriented schemes and equity arbitrage schemes.

Investment Breakdown

According to the draft, 95%-100% of the scheme’s assets will be invested in other mutual fund schemes. Within that, allocations will range between 35%-65% in debt-oriented schemes and 35%-65% in arbitrage schemes. Up to 5% of assets may be deployed in debt and money market instruments, including T-bills, repos, and government securities. The fund will not invest in derivatives, structured debt, REITs, InvITs, or overseas securities.

Pricing and Minimum Investment

Units will be offered at ₹1,000 each during the New Fund Offer (NFO) period. The minimum application amount is ₹1,000, with additional investments allowed in multiples of ₹1. Minimum redemption is also set at ₹1,000 or 0.001 units or account balance, whichever is lower.

Liquidity and NAV Disclosure

Units will be available for purchase and redemption on all business days, starting within five business days from the date of allotment. NAVs will be disclosed daily on the AMC and AMFI websites.

Benchmark and Fund Management

The benchmark is a composite: 60% Nifty Corporate Bond Index A-II, 35% Nifty 50 Arbitrage, and 5% Nifty 1D Rate Index. The fund will be jointly managed by Vikas Garg (debt) and Deepak Gupta (arbitrage).

Exit Load and Expenses

There will be no exit load applicable. The Estimated Total Expense Ratio (TER) is capped at 2% of daily net assets, including expenses of the underlying funds. No entry load will be charged.

Conclusion

This proposed hybrid fund of fund is to offer a combination of arbitrage and debt exposure through investments in other actively managed schemes. Once cleared by SEBI, the scheme will open for public subscription as per regulatory timelines.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.