Overnight Funds within the Open-ended debt mutual fund schemes is the newest category investing in debt and money market instruments with overnight maturity of just 1 day. Overnight Funds are considered most liquid and relatively safest debt schemes.
Overnight Funds are amongst the new category of Debt Mutual Fund schemes which got created, when SEBI in October 2017, re-categorised mutual fund schemes, both equity and debt, in order to bring about uniformity in products.
“Overnight Funds are ideal for the first time investors, new to Mutual Funds. Although investments are market-linked, this category is considered to be a good start towards building a financially sound Mutual Fund portfolio,” N S Venkatesh said.
The fact that Average AUMs in Overnight Funds have grown five times and commensurate Folios too, growing more than two times, is a very good indicator of the growing affinity of the investors towards Overnight Funds, Venkatesh said.