Trust Mutual Fund has launched its new fund offer (NFO) – TRUSTMF Overnight Fund. The scheme aims to provide reasonable returns commensurate with overnight call rates and providing a high level of liquidity, through investments in overnight securities having maturity/unexpired maturity of one business day.

The NFO will be open for subscription from 17 January and close on 18 January. It will be managed by Anand Nevatia, Fund Manager, Trust Mutual Fund. This is the fourth launch from the fund house.

The scheme is categorised under ‘low’ risk category in the riskometer that indicates relatively low credit as well as interest rate risk.

As per the AMC, this product is suitable for investors who are seeking regular income over short term that may be in line with overnight call rates with low risk and high level of liquidity and those looking for investments in debt and money market instruments with overnight maturity

Speaking on the launch of the fund, Sandeep Bagla, CEO, TRUST Mutual Fund said, “Overnight Funds have emerged as one of the safest vehicles for corporates to park their excess money. TRUSTMF Overnight Fund thus provides Corporates a low-risk option for them to place their funds, which can be easily withdrawn as and when they need liquidity. TRUSTMF Overnight Fund will continue to reflect our commitment to creating quality products that follow the highest standards of safety for our investors."

In terms of taxation, overnight funds are considered as debt funds. The gains from the sale of the fund will be considered capital gains. While the short-term gains (if sold before three years) is taxed at the applicable tax rate for individual’s slab of income, long term capital gains are taxed at 20% with indexation benefits.