Vivriti Short Term Debt Fund

The Vivriti Short Term Debt Fund aims to deliver consistent returns by targeting 300-325 basis points of post-tax, post-inflation real returns. The fund is designed for a minimum investment horizon of one year, offering structural liquidity and low volatility. 

The Vivriti Short Term Debt Fund is designed to generate superior risk-adjusted real returns by investing in investment-grade debt securities issued by mid-market operating companies, ensuring diversification across issuers and sectors. As a pure fixed-income product, the fund delivers relatively predictable and less volatile returns compared to other open-ended mutual funds. Structured as a Category III AIF, it offers the flexibility of quarterly partial or full redemptions, providing investors with a unique combination of liquidity and stability. Additionally, the fund enables quicker and more consistent access to private credit markets compared to Category II AIFs, making it a compelling choice for investors seeking stable income with efficient portfolio management.

Key Features

1. Target Returns:
   • Pre-tax XIRR: 13.5% to 14%.
   • Post-tax XIRR: ~7-7.25%.
2. Subscription & Redemption:
   • Fortnightly subscriptions and quarterly redemptions with a 15-day notice period.
   • No lock-in period; however, a 2% exit load applies for redemptions within 180 days.
3. Risk Management:
   • Strict adherence to investment-grade credit quality.
   • Positive ALM even under stress scenarios (20% stress factor considered).

The Vivriti Short Term Debt Fund operates on a robust investment philosophy centered around creating a well-diversified, high-quality fixed-income portfolio. The fund emphasizes investments in 100% investment-grade securities, prioritizing credit quality and risk management. It adopts a conservative approach, focusing on short-maturity assets to minimize volatility and deliver consistent returns.

The fund’s investment strategy complements its philosophy by maintaining a carefully structured portfolio. It primarily invests in NCDs, commercial papers, and liquid instruments, with an average maturity of 15-18 months. The portfolio is designed to ensure optimal diversification, with issuer concentration capped at less than 7.5% for AUM exceeding INR 500 crore. To manage liquidity effectively, the fund employs a combination of quarterly or half-yearly amortizing securities and structural liquidity mechanisms. By reinvesting surplus cash flows after meeting expenses, redemptions, and fees, the fund aims to maximize returns while maintaining a low-risk profile, making it ideal for investors seeking stable and predictable income.