Description

TRUST Asset Management announces merger of TRUSTMF Banking & PSU Fund into TRUSTMF Corporate Bond Fund effective February 11, 2026, with 30-day exit window for unitholders without exit load.

Summary

TRUST Asset Management Private Limited has announced the merger of TRUSTMF Banking & PSU Fund (Merging Scheme) into TRUSTMF Corporate Bond Fund (Surviving Scheme), effective February 11, 2026. The Board of Directors of both TRUST Asset Management and TRUST AMC Trustee have approved this merger, which has received SEBI’s “No Objection” dated December 26, 2025. Unitholders are provided a 30-day exit window from January 12, 2026 to February 10, 2026 without any exit load.

Key Points

  • TRUSTMF Banking & PSU Fund will merge into TRUSTMF Corporate Bond Fund
  • Merger effective date: February 11, 2026
  • SEBI issued “No Objection” on December 26, 2025
  • 30-day notice period with exit option: January 12, 2026 to February 10, 2026 (both days inclusive)
  • No exit load applicable during the notice period
  • Merging Scheme will cease to exist after effective date
  • Unitholders of Merging Scheme will receive units in Surviving Scheme at last available NAV or Face Value
  • Units allotted treated as fresh subscriptions but original allotment date retained for exit load calculation
  • Pledge/lien/encumbrances on units will be transferred to corresponding units in Surviving Scheme
  • No action required from unitholders if they agree with the merger

Regulatory Changes

The merger is considered a change in fundamental attributes under Regulation 18(15A) of SEBI Mutual Funds Regulations, 1996. SEBI has provided regulatory approval through its “No Objection” dated December 26, 2025.

Compliance Requirements

  • Individual communication being sent to all existing unitholders of both schemes
  • Unitholders who disagree with the merger must exercise exit option during January 12-February 10, 2026
  • AMC to ensure proper NAV-based allotment or Face Value-based allotment (if no units exist in corresponding option)
  • Transfer of all encumbrances (pledge/lien) from Merging Scheme units to Surviving Scheme units

Important Dates

  • December 26, 2025: SEBI “No Objection” issued
  • January 12, 2026: Exit window opens (notice period begins)
  • February 10, 2026: Exit window closes (notice period ends)
  • February 11, 2026: Merger effective date - Merging Scheme ceases and units allotted in Surviving Scheme

Impact Assessment

For Unitholders of Merging Scheme (Banking & PSU Fund):

  • Portfolio will shift from predominantly Bank/PSU/PFI/Municipal Bond investments to AA+ and above rated corporate bonds
  • Credit risk profile changes from “relatively low” to “moderate”
  • Interest rate risk remains “relatively high” in both schemes
  • Original allotment dates preserved for exit load calculation purposes
  • Any investments made during exit window will also be merged

For Unitholders of Surviving Scheme (Corporate Bond Fund):

  • No change in investment objective, asset allocation, investment pattern, or annual recurring expenses
  • Scheme will absorb assets from Banking & PSU Fund

Overall Impact:

  • Consolidation of two debt schemes with similar interest rate risk profiles
  • No new scheme created; reduction in total scheme count
  • Unitholders have adequate exit option without penalty if they disagree with the merger
  • Scheme attributes of Surviving Scheme remain unchanged

Impact Justification

Medium importance as it affects existing unitholders of two debt schemes with exit options provided. No direct equity market impact but relevant for mutual fund investors.