Falling Interest Rates Prompt Union Mutual Fund to Launch Tax-Efficient** Income Oriented Fund: Union Income Plus Arbitrage Active FOF

Mumbai, 22 May 2025:

Union Mutual Fund has announced the launch of Union Income Plus Arbitrage Active FOF-an open-ended scheme that seeks to combine the relatively lower volatility of debt investments with the potential of arbitrage strategies along with tax efficiency by investing in units of Arbitrage and Debt Oriented Schemes. The launch comes at a time when interest rates are on a downward trajectory, prompting investors seeking alternatives to traditional debt fund.

The fund is designed for investors with a medium- to long-term investment horizon, offering a simplified and tax-efficient solution for income generation. By blending allocations through investments in units of arbitrage and debt-oriented mutual fund schemes, the fund aims to deliver a balanced income strategy while benefitting from equity-like tax treatment if held for more than 2 years.

We believe that asset allocation is fundamental not only to wealth creation but also to wealth preservation. While debt portion remains a crucial component of a-balanced portfolio, investor participation in Debt oriented mutual funds schemes has historically been limited. The new tax framework for Fund of Funds (FoFs) presents a valuable opportunity to address this gap by offering a tax-efficient investment option.

Our recent product roadmap-which includes the launch of the Union Multi Asset Allocation Fund(An open-ended scheme investing in Equity, Debt, Gold and/ or Silver) in August 2024, followed by the Union Gold ETF(An open-ended scheme replicating/tracking domestic price of Gold), Union GOLD ETF FUND OF FUND

(An open-ended Fund of Fund Scheme investing in units of Union Gold ETF.) , and now the Union Income Plus Arbitrage Active FOF-demonstrates our continued commitment to delivering investor-centric solutions, not just launching conventional products.

Key Features and Benefits:

• Tax Efficiency**: Eligible for equity-oriented taxation with long-term capital gains taxed at just 12.5% (including surcharge, excluding cess) if held for more than 24 months.


• Diversified Income Strategy: Combines the potential of income generation of debt funds with the arbitrage opportunities across equity markets.


• Simplified Portfolio Management: Offers access to multiple strategies through a single NAV-eliminating the need to manage multiple fund exposures individually.


• Expert Management: The fund will be jointly managed by Mr. Vishal Thakker (Arbitrage portion), Mr. Anindya Sarkar (Debt portion), and Mr. Shrenuj Parekh (Debt Portion).

Union Income Plus Arbitrage Active FOF seeks to dynamically allocate between arbitrage and debt fund components based on market conditions, aiming to optimize risk-adjusted returns by investing in the units of underlying schemes.

Commenting on the launch, Mr. Parijat Agrawal, Head – Fixed Income, Union AMC Pvt. Ltd., said: "Union Income Plus Arbitrage Active FOF is crafted with an aim to help investors navigate their investments without the burden of constant monitoring. By blending arbitrage and debt funds under a single structure, it simplifies access to professionally managed, tax-efficient income solutions."

Adding to this, Mr. Madhu Nair, MD & CEO, Union AMC Pvt. Ltd., said: "Higher taxation on conventional debt-oriented funds tends to impact net returns. This fund aims to offer better tax-adjusted outcomes, making it a compelling choice for investors seeking tax efficient income generation within their portfolio.

About the Scheme:

The fund aims to provide income over the medium to long term by investing primarily in units of arbitrage and debt mutual fund schemes. The allocation will be dynamically managed, with up to 65% invested in arbitrage strategies or in debt-oriented funds.

UNION INCOME PLUS ARBITRAGE ACTIVE FOF

(An open-ended FoF investing in units of Arbitrage and Debt Oriented Schemes.)

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Note: The above product labelling assigned during the New Fund Offer (NFO) is based on internal assessment of the Scheme Characteristics or model portfolio and the same may vary post NFO when actual investments are made.

The Union Income Plus Arbitrage Active FOF NFO will open for subscriptions on 22nd May 2025 and close on June 5th 2025, and will re-open within 5 business days from allotment.

Union GOLD ETF

(An open-ended scheme replicating/tracking domestic price of Gold)

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Union GOLD ETF FUND OF FUND

(An open-ended Fund of Fund Scheme investing in units of Union Gold ETF.)

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Union MULTI ASSET ALLOCATION FUND

(An open-ended scheme investing in Equity, Debt, Gold and/ or Silver)

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Disclaimer:

The investment strategy of the Scheme will be reviewed from time to time and might change considering the best interest of the unitholders and if the market conditions warrant it. However, the investment strategy shall be in line with the strategy stated in the SID of the Scheme. Please refer to the SID for more details on the investment strategy and asset allocation/underlying Schemes.

**As the Income Tax Act, 1961, introduced by the Finance (No. 2) Act 2024, applicable from FY 2025-26, Union Income Plus Arbitrage Active FOF is classified as "specified mutual fund" when the fund invests sixty-five per cent or more of its total proceeds in debt, money market instruments. Accordingly, the tax implications for investments made in the Scheme shall be governed by the provisions applicable to specified mutual funds under the said section. i.e. considered as deemed short term capital asset. However, in case the fund invests less than sixty-five per cent of its total proceeds in debt, money market instruments; the tax implications on the same shall depend on the period of holding being 24 months and tax rates shall apply accordingly. The information set out above is included for general information purposes only and does not constitute legal or tax advice. In view of the individual nature of the tax consequences, each investor is advised to consult his or her own tax consultant with respect to specific tax implications. Neither Union Mutual Fund nor Union Asset Management Company Private Limited nor any of their directors, officers, employees, or affiliates any person connected with it shall be held liable for any direct, indirect, incidental, or consequential loss arising out of or in connection with the use of this information.

The information set out is neither a complete disclosure of every material fact of the Income-tax Act, 1961 nor does it constitute tax or legal advice. Investors should be aware that the fiscal rules/ tax laws may change and there can be no guarantee that the current tax position may continue indefinitely. In view of the individual nature of the tax consequences, each investor is advised to consult his/ her own professional tax advisor. Investors alone shall be fully responsible / liable for any decision taken on the basis of this document. Neither Union Mutual Fund nor Union Asset Management Company Private Limited nor any person connected with it accepts any liability arising from the use of this information.

The information in this document alone is not sufficient and should not be used for the development or implementation of an investment strategy. Neither the Sponsors/the AMC/ the Trustee Company/ their associates/ any person connected with it, accepts any liability arising from the use of this information. While utmost care has been exercised while preparing this document, the Sponsors/ the AMC/ the Trustee Company/ their associates/ any person connected with it, do not warrant the completeness or accuracy of the information and disclaim all liabilities, losses and damages arising out of the use of this information. The recipients of this material should rely on their investigations and take their own professional advice. Past performance may or may not be sustained in future.

Please refer the Scheme Information Document for complete details about the Scheme. Copy of all Scheme Related Documents can be obtained from any of our AMC offices/ Customer Service Centres/ distributors as well as from our website www.unionmf.com