Asset management firm SBI Mutual Fund is scheduled to launch three targeted maturities funds (TMFs) in addition to expanding its options in the passive sector.
TMFs assist investors in navigating the risk of loans by aligning the portfolios to the date of maturity of their fund.
These are debt funds that are passive which track an index of bond underlying.
Therefore, the portfolio of these funds includes bonds that form part of the index that is underlying and have maturities that are in the vicinity of the maturity of the fund’s declared.
The bonds that make up this portfolio will be held until their maturity, and any interest that are received during the holding period are invested back into the fund.
SBI CRISIL IBX Gilt Index – June 2036 Fund and SBI CRISIL IBX Gilt Index – April 2029 Fund,
and the SBI CRISIL IBX SDL Index – September 2027 Fund are all open-ended index funds that invest in the constituents of the CRISIL IBX Gilt Index – June 2036 Index as well as
the CRISIL IBX Gilt Index – the April 2029 Index, as well as the CRISIL IBX SDL Index – September 2027 Index.
The fund’s new offer (NFO) of the SBI CRISIL IBX Gilt Index – June 2036 Fund will be open on September 22 and will end on September 28th.
The NFOs for the SBI CRISIL IBX Gilt Index-April 2029 Fund and SBI CRISIL IBX SDL Index September 20, 2027 Fund will begin on September 26 and will end on October 3rd.
D P Singh, deputy managing director and chief business officer of SBI Mutual Fund, said, ” TMFs can be an ideal investment for investors who are in the trend of rising interest rates since they give investors the possibility of investing in current market yields.
Furthermore, if the investor holds the funds until the end of the investment, this could assist in managing the risks associated with changes in the interest rate cycle.
These funds typically invest in instruments with higher ratings like the government’s securities and AAA-rated security and PSU bond.”
The scheme would invest at least 95 percent and up to 100 percent of its assets in securities that are covered in CRISIL IBX Gilt Index.
CRISIL IBX Gilt Index – June 2036/ CRISIL IBX Gilt Index – April 2029 or CRISIL IBX SDL Index – September 2027.
They can also put up to 5 percent from their portfolios in securities due to mature on or before the date of maturity of the Scheme and money market instruments , including Triparty Repo and the units in liquid mutual funds.
The minimum amount for application is Rs5,000. It is in multiples of Rs 1 from there on.
The fund manager for the schemes is Dinesh Ahuja.