As per the mandate, YES Liquid Fund (YLF) will allocate all its assets in such instruments. The Scheme may undertake repo / reverse repo transactions in Corporate Debt Securities; Credit Default Swaps; Short Selling and such other transactions in accordance with guidelines issued by RBI and SEBI from time to time. Further, YLF may invest upto 50% of its net assets in derivatives as permitted by the guidelines by SEBI.

Liquid fund entails low risk, but are not absolutely safe. However, to park funds for the short-term, say a month to a year, they can be considered provided you are willing to assume some investment risk.

Table 1: NFO Details

Type	An open-ended debt	Category	Liquid scheme
Investment Objective	The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity by investing in high-quality debt and money market instruments. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The Scheme does not assure or guarantee any returns.
Min.Investment	Rs 10,000 and in multiples of Re 1 thereafter	Face Value	Rs 10,000 per unit
Plans	• Direct • Regular	Options	• Growth • Dividend Re-investment Facility Pay-out Facility
Entry Load	Not Applicable	Exit Load	Nil
Fund Manager	Mr Piyush Baranwal	Benchmark Index	CRISIL Liquid Fund Index
Issue Opens	January 02, 2019	Issue Closes:	January 16, 2019

(Source: Scheme Information Document)

How will YES Liquid Fund allocate its assets?

Under normal circumstances, the scheme’s asset allocation pattern will be as under:

Table 2: YLF’s Asset Allocation

Instruments	Indicative allocations (% of Total Assets)		Risk Profile
	Minimum	Maximum	(Low/ Medium/ High)
Debt Instruments# and Money Market Instruments*with a maturity/residual maturity of up to 91 Days	0	100	Low to Medium

* Includes commercial papers, commercial bills, treasury bills, Government securities having an unexpired maturity up to one year, call or notice money, certificate of deposit, usance bills and any other like instruments as specified by the Reserve Bank of India from time to time.

#Debt Securities includes securitized debts and liquid schemes launched by SEBI registered Mutual Fund or schemes that invest predominantly in money market instruments/ securities.

Securitized debt cumulative allocation not to exceed 50% of the net assets of the Scheme.

The Scheme may invest upto 50% of its net assets in Derivatives.

(Source: Scheme Information Document)

What will be the Investment Strategy?

To achieve the investment objective of the Scheme, the Fund shall be managed to generate optimal returns consistent with low to moderate levels of risk and high liquidity by investing in high-quality debt and money market instruments.

The Scheme is positioned at the lowest level of the risk-return matrix, which will be the guiding line to make suitable investments with low risk. The Scheme will invest predominantly in money market securities with some allocation towards other debt securities to enhance the portfolio return.

The portfolio, for managing the liquidity will be structured using the matrix of asset liability management whereby maturity of the assets will seek to align with historical observed trends of liabilities. The Scheme will seek to generate reasonable return along with maintaining liquidity with the help of cash and cash equivalent instruments.

The fund management team will take an active view of the interest rate movement by keeping a close watch on various parameters of the Indian economy, as well as developments in global markets.

The investment team of the AMC will, as a mitigation and risk control procedure, will carry out rigorous credit evaluation of the issuer company proposed to be invested in. The credit evaluation will analyse the operating environment of the issuer, the sector analysis, business model, management, governance practices, quality of the financials, the past track record as well as the future prospects of the issuer and the financial health of the issuer.

YLF may also use derivative instruments like interest rate swaps, Overnight Indexed Swaps (OIS), forward rate agreements, interest rate futures (as and when permitted) or such other derivative instruments used for the purpose of hedging, and portfolio balancing or such other purpose as may be permitted under the regulations and guidelines from time to time.

Who will manage the YES Liquid Fund?

YES Liquid Fund will be managed by Mr Piyush Baranwal. He holds a Bachelor's degree in Engineering (B.E.), has a PGDM to his credit, and is a Chartered Financial Analyst (CFA).

Mr Baranwal holds over 10 years’ experience in portfolio management and trading in fixed income securities. Prior to joining, YES Mutual Fund in October 2018, Mr Baranwal has worked as an Investment Manager for 4.5 years with BOI AXA Investment Managers, before that with Morgan Stanley Investment Management for 4.5 years, and was a part of Principal PNB Asset Management from May 2008 to Jan 2011.

The outlook for YES Liquid Fund

The fortune of YLF will be hinged on the quality of debt papers and money market instruments it would hold in its portfolio. The proportion of Commercial Papers (an unsecured negotiable money market instrument issued by corporates, primary dealers and all India Financial Institutions as an alternative source of short-term borrowings) remains to be seen; because in the past, these instruments have negatively impacted liquid funds.

[Read: How the IL&FS Fiasco Put Money In Liquid Funds At Risk]

In addition, factors affecting the debt market such as the direction of policy rates and the consequent impact on yields, ratings assigned to papers held in the portfolio, etc. are some of the factors that could weigh on the potential performance of YLF even as the fund house has devised a risk mitigation strategy.

Hence, consider your risk appetite and time horizon before investing in YLF.

To read PersonalFN’s view click here.

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DISCLOSURE AS PER SECURITIES AND EXCHANGE BOARD OF INDIA (RESEARCH ANALYSTS) REGULATIONS, 2014  

About the Company including business activity

Quantum Information Services Private Limited (QIS) was incorporated on December 19, 1989.

QIS was promoted by Mr. Ajit Dayal with an objective of providing value-based information / views on news related to equity markets, the economy in general, sector analysis, budget review and various personal products and investments options available to the Public. It was the first company to start equity research on an institutional level.

'PersonalFN' is a service brand of QIS and was started in the year 1999. In 1999, the Company registered the Domain name www.personalfn.com for providing information on mutual funds and personal financial planning, financial markets in general, etc. and services related to financial planning and research in various financial instruments including mutual funds, insurance and fixed income products to customers. It offers asset allocation and researched investment recommendations through its financial planning services.

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Details of associates

1. Money Simplified Services Private Limited;

2. PersonalFN Insurance Services India Private Limited ;

3. Equitymaster Agora Research Private Limited;

4. Common Sense Living Private Limited;

5. Quantum Advisors Private Limited;

6. Quantum Asset Management Company Private Limited;

7. HelpYourNGO.com India Private Limited;

8. HelpYourNGO Foundation;

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11. HYNGO India Private Limited;

12. Rahul Goel;

13. I V Subramaniam.

Disclosure with regard to ownership and material conflicts of interest

1. ‘subject company’ is a company on which a buy/sell/hold view or target price is given/changed in this Research Report;

2. Neither QIS, it's Associates, Research Analyst or his/her relative have any financial interest in the subject Company;

3. Neither QIS, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one per cent or more securities of the subject Company, at the end of the month immediately preceding the date of publication of the research report;

4. Neither QIS, it's Associates, Research Analyst or his/her relative has any other material conflict of interest at the time of publication of the research report except that QIS (PersonalFN) is, as per SEBI (Mutual Funds) Regulations 1996, an associate / group Company of Quantum Asset Management Company Private Limited and Trustees and Sponsor of Quantum Mutual Fund (QMF) and to that extent there may be conflict of interest while recommending any schemes of QMF. However, any such recommendation or reference made is based on the standard evaluation and selection process, which applies uniformly for all Mutual Fund Schemes. The payment of commission (upfront / annualized & trail), if any, for any Schemes by QMF to QIS (PersonalFN) is also at arm's length and as per prevailing market practices.

 Disclosure with regard to receipt of Compensation

1. Neither QIS nor it's Associates have received any compensation from the subject Company in the past twelve months;

2. Neither QIS nor it's Associates have managed or co-managed public offering of securities for the subject Company;

3. Neither QIS nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject Company;

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 General disclosure

1. The Research Analyst has not served as an officer, director or employee of the subject Company.

2. QIS or the Research Analyst has not been engaged in market making activity for the subject Company.

Definitions of Terms Used

1. Buy recommendation: This means that the subscriber could consider buying the concerned fund keeping in mind the tenure and objective of the recommendation service.

2. Hold recommendation: This means that the subscriber could consider holding on to the fund until further update. However, additional purchase via ongoing SIP can be considered.

3. Sell recommendation: This means that the subscriber could consider selling the fund keeping in mind the objective of the recommendation service.

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