Edelweiss Asset Management Company Limited on Monday launched Edelweiss NIFTY PSU Bond Plus SDL Index Fund – 2026.
This index fund will invest in AAA rated PSU Bonds as well as State Development Loans (SDL), the company said in a release.
With an investment amount that is as low as Rs 5,000, the fund will have a defined maturity date of April 30, 2026. At maturity, investors will get back their investment proceeds. The fund will aim to hold the bonds till maturity in order to provide stability and visibility of returns to investors. Taxed at 20% post indexation, this fund will be more tax efficient as compared to traditional avenues.
“Post the success we’ve seen with corporate bond ETFs with the launch of Bharat Bond last year, it is heartening to now see a significant rise in popularity of target maturity debt funds among investors,” said Edelweiss Mutual Fund CEO Radhika Gupta.
Yields have risen in last couple of weeks and this is a good time to invest in a target maturity fund and lock-in investments at higher yields. This index fund can give a fair amount of visible and tax efficient returns, along with higher safety and transparency at a low cost, added the CEO.
This is a first ever, open-ended, Target Maturity Index Fund that will predominantly invest in the constituents of NIFTY PSU Bond Plus SDL 50:50 Index.
Proportion of investments of AAA PSU Bonds and SDLs will be equally divided with a weightage of 50% each. Exposure to any single company’s bonds or loans would be capped at 15% of the corpus. Subsequently, there will be a quarterly rebalancing and review of the index constituents, the company release added.
The Edelweiss NIFTY PSU Bond Plus SDL Index Fund – 2026 NFO will be open for subscription between March 10 to March 16, 2021.