SBI Mutual Fund (MF) has announced the launch of three Target Maturity Funds (TMFs), further expanding its offering in the passive segment. The funds are SBI CRISIL IBX Gilt Index – June 2036 Fund, SBI CRISIL IBX Gilt Index – April 2029 Fund, and SBI CRISIL IBX SDL Index – September 2027 Fund.
These funds are open-ended Target Maturity Index funds investing in the components of CRISIL IBX Gilt Index – June 2036 Index, CRISIL IBX Gilt Index – April 2029 Index and CRISIL IBX SDL Index – September 2027 Index.
What are Target Maturity Funds?
target maturity fund Debt is a category of mutual funds that have a specific maturity date that invests in bonds included in the underlying index, and holds it until maturity to distribute income to investors at a later date. These funds mainly invest in high rated instruments like government securities, AAA rated securities and PSU bonds.
“TMFs can be a good fit for investors in the current rising interest rate scenario as these funds are giving investors an opportunity to invest at current market returns. In addition, if the investor stays invested till the maturity of the fund, it can also help in managing the risk associated with changes in the interest rate cycle. As compared to the traditional investment avenues, these funds have more liquidity as investors have the flexibility to enter and exit the scheme at any point of time. These funds give tax efficient returns due to the indexation benefits offered by debt funds,” said DP Singh, Deputy MD and Chief Business Officer, SBI Mutual Fund,
SBI MF said the schemes will invest minimum 95% and maximum 100% of their assets in securities covered by CRISIL IBX Gilt Index – June 2036 / CRISIL IBX Gilt Index – April 2029 / CRISIL IBX SDL Index – September 2027. It can invest up to 5% of its assets in government securities maturing on or before the maturity date of the scheme, money market instruments including tripartite repos and units of liquid mutual funds.
The investment objective of the scheme is to provide returns that are commensurate with the total returns of the securities represented by the underlying index, subject to tracking error, said the release issued by SBI MF. The fund manager of these schemes is Dinesh Ahuja.
catch all Mutual Fund News And updates on Live Mint. download mint news app To get daily market updates & Live business News,