Union Mutual Fund launches Low Duration Fund for short-term investments

Union Mutual Fund has launched the Union Low Duration Fund, targeting investors with a short-term investment horizon of three to twelve months. The New Fund Offer (NFO) opens on June 26 and will close on July 10.

The open-ended debt scheme will invest in a mix of debt and money market instruments. It aims to maintain a Macaulay duration between 6 to 12 months, making it suitable for investors seeking low-duration exposure with the potential for better risk-adjusted returns.

The fund is designed for investors who wish to optimize idle money without chasing higher yields. According to the fund house, the product offers structure, liquidity, and timing advantages, especially in the current macroeconomic backdrop where interest rates and liquidity levels remain dynamic.

“This scheme is not about chasing higher yields. It’s about offering structure, timing, and a role for your short-term money,” said Madhu Nair, CEO, Union Asset Management Company. He added that the fund provides a pragmatic option for idle capital in a market influenced by evolving interest rate cycles.

Parijat Agrawal, Head of Fixed Income at Union AMC, said the fund’s low duration strategy gives it flexibility to respond quickly to changing conditions. “We’re closely monitoring liquidity trends, yield curve movements, and macro data. This scheme is both timely and relevant,” he said.

Union AMC expects short-duration instruments to benefit from favourable spreads and ongoing monetary transmission. The fund targets a broad investor base—from retail to institutional investors—interested in short-term income generation.

Investors should read the Scheme Information Document (SID) and consult financial advisers to assess whether the product suits their investment goals.