Learn About Mutual Fund

1. 10-Mar-21
IDFC Interval Fund – Series 17
(A Debt Oriented Interval Fund)
Product Proposition:
- A 5 year Interval fund – Opens for subscription and redemption every 5 years
- Will invest in State Development Loan (SDL) predominantly – High quality offering
NFO Opens: Friday, March 19, 2021
NFO Closes: Wednesday, March 24, 2021
Tenure of the interval: 1825 days from the date of allotment/closure of the Specified Transaction Period of the Scheme.
The Specified Transaction Period shall be March 24, 2026 and March 25, 2026 (in case these are business days)
Why Now?
a. Yields have risen in the last two months; bonds have seen reasonable correction. These assets are currently
available at higher yields.
5-year GSec 10-year SDL
28-Feb-2021 6.03 6.91
31-Dec-2020 5.04 6.28
Yield movement 98bps 62bps
To reflect the market movement in the 5 year & SDL space, we have taken 5 year GSec and 10 year SDL, in absence of a 5
year SDL index; SDLs are usually available at a higher spread than 5 year government bond of similar maturity (Source:
Bloomberg, CCIL)
b. SPREAD GRAPH
10-year SDL v/s 1 month OIS spread today are at 330bps compared to a 5-year average spread of 180bps
10 year SDL index has been taken in absence of a 5 year SDL index
0
50
100
150
200
250
300
350
400
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21
10yr SDL v/s 1Month OIS

2. 10-Mar-21
5-year GSec v/s 1 month OIS spread today are at 235bps compared to a 5-year average spread of 100bps
Source: Bloomberg, CCIL
c. Given the steepness of the yield curve, the intermediate points on the curve provide attractive yields
Source: Bloomberg; Sovereign curve, Data as on 9th
March 2021
d. In a closed ended, roll down structure one can buy and hold onto securities within the maturity date of the fund,
without worrying on the inflows/outflows, liquidity of the market or impact cost of buying/selling.
e. A 5 year structure provides investor with indexation benefit, thereby reducing the taxation impact as compared
to a traditional investment option of similar maturity.
-100
-50
0
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100
150
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250
300
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21
5 year Gsec v/s 1Month OIS
3.80
4.30
4.80
5.30
5.80
6.30
6.80
1 2 3 4 5 6 7 8 10 11 13 14 15
Yield
(%)
Years
Sovereign Yield Curve

3. 10-Mar-21
Traditional
Debt
Investment
Mutual Fund
Tenure (in years) 5.00 5.00
Indexations Availed N. A 5
Return 6.30% 6.30%
Amount Invested 100,000 100,000
Redemption Value 135,727 135,727
Gains 35,727 35,727
Indexation Cost N. A 121,665
Gains (post indexation as applicable) N. A 14,062
Tax applicable 30% 20%
Tax Payable 10,718 2,812
Post Tax Gains 25,009 32,915
Post Tax Redemption Value 125,009 132,915
Returns 4.57% 5.86%
This is for illustration purpose only
Data as on 28th
February’21. Traditional investment is taxed at 30% and is assumed to be at the same rate as index (for
illustration) and mutual fund is taxed at 20% post indexation. Cess and surcharge are excluded. Indexed cost arrived at
assuming 4%p.a. growth rate in CII (Cost Inflation Index). Expenses, cost of reinvestment, impact of roll down have not been
considered.
f. Low cost option, suitable for investors with investment horizon matching that of the fund and with an option to
continue investing for another set of 5 years (thereby continuing to build onto indexation benefit).
Disclaimer:
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
The Disclosures of opinions/in house views/strategy incorporated herein is provided solely to enhance the transparency about the
investment strategy / theme of the Scheme and should not be treated as endorsement of the views / opinions or as an investment
advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document

4. 10-Mar-21
has been prepared on the basis of information, which is already available in publicly accessible media or developed through analysis
of IDFC Mutual Fund. The information/ views / opinions provided is for informative purpose only and may have ceased to be current
by the time it may reach the recipient, which should be taken into account before interpreting this document. The recipient should
note and understand that the information provided above may not contain all the material aspects relevant for making an investment
decision and the security may or may not continue to form part of the scheme’s portfolio in future. Investors are advised to consult
their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. The
decision of the Investment Manager may not always be profitable; as such decisions are based on the prevailing market conditions
and the understanding of the Investment Manager. Actual market movements may vary from the anticipated trends. This information
is subject to change without any prior notice. The Company reserves the right to make modifications and alterations to this statement
as may be required from time to time. Neither IDFC Mutual Fund / IDFC AMC Trustee Co. Ltd./ IDFC Asset Management Co. Ltd nor
IDFC, its Directors or representatives shall be liable for any damages whether direct or indirect, incidental, punitive special or
consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.