HSBC Mutual Fund (MF) has launched HSBC CRISIL IBX 50:50 Gilt Plus SDL April 2028 Index Fund, an open-ended Target Maturity Index fund, which is funded by CRISIL IBX 50:50 Gilt Plus SDL Index – April 2028 Tracking keeps. The target maturity fund has a fixed tenure. The securities maturing on or before the maturity date follow a predefined index.
According to the fund house, the fund is focused on the short end versus the rich stability of the curve. As per the example given in his presentation, yield pickup between 3 and 6 years (target maturity) is 80 basis points versus only 30 basis points in 6-10 years. It added that the 6-year segment continues to be a sweet spot for investment as the stability of the segment over 1-3 years is high. It is also less volatile than the 10 year and above segment.
The NFO opens for subscription on March 15, 2022 and closes on March 28, 2022. The entry load and exit load for the scheme is zero. Minimum subscription amount is 5,000 per application and thereafter in multiples of Rs. The minimum application amount is also applicable for switch-in.
The fund will invest in G-Sec and SDL (State Development Debt) papers with 50% allocation each. The fund manager will buy securities whose maturity is close to the index’s stipulated maturity date and aim to hold them till maturity.
It is classified as a fund with relatively high interest rate risk and relatively low credit risk.
In terms of taxation, when investments held for more than 3 years, these are taxed at 20% after indexation. If held for less than 3 years, short-term capital gains are taxed at the individual’s slab rates.
The performance of the scheme will be benchmarked against CRISIL IBX 50:50 Gilt Plus SDL Index – April 2028 and the fund will be managed by Kapil Punjabi.
Don’t miss a story! Stay connected and informed with Mint.
download
Our App Now!!