L&T Mutual Fund today launched a debt scheme which is aimed at both retail and institutional investors and seeks to benefit from possible change in interest rate scenario in coming quarters.

L&T Short Term Debt Fund, which opended today, will close on December 21, the asset management arm of L&T Finance Holdings said here.

"The fixed income market seems to be poised at an interesting juncture. Expected trends in interest rates will provide investors with an opportunity to invest in more actively managed funds," Ved Prakash Chaturvedi, Chief Executive (Capital Markets and Investment Management Group), L&T Finance Holdings told reporters here.

The fund is an appropriate fixed income product for investors who can benefit in the short term from the possible change in interest rate scenario in coming quarters, he said.

The private fund house is expecting to mop up Rs 100- 200 crore from the scheme initially, Chaturvedi said.

The fund will invest between 65 per cent and 100 per cent of its corpus in debt and money market instruments with residual maturity up to 24 months, having low risk profile.

Further, a maximum of 35 per cent of the corpus could be invested in debt instruments with residual maturity greater than 24 months and less than 60 months having low to medium risk profile.

The average maturity of the portfolio of the scheme would not exceed three years, he said, adding the minimum application amount is Rs 5,000.

L&T Mutual Fund has around Rs 5,000 crore under management with an overall 21 offerings. "Our main focus at the moment is to increase our investor base," he said.