Edelweiss Asset Management Company Limited, one of India's fastest growing AMCs, announced the launch of Edelweiss NIFTY PSU Bond Plus SDL Index Fund - 2026 today. Passively managed, this first of its kind index fund will invest in AAA rated PSU Bonds as well as State Development Loans (SDL).
Key Highlights of the Edelweiss NIFTY PSU Bond Plus SDL Index Fund - 2026:
- India's first target-maturity, debt-index fund
- Will invest in State Development Loans (SDLs) plus PSU bonds
- Bond-like structure with fixed maturity - stability and visibility in returns
- Passively managed Index Fund will keep costs low
- Lower taxation due to indexation benefit
- After successful launch of BHARAT Bond ETF along with Government of India, Edelweiss AMC now launches a unique Index Fund different from BHARAT Bond ETF investing in State Development Loans (SDLs) plus PSU bonds*
With an investment amount that is as low as INR 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. 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. With the financialization of savings taking centre stage, such solutions will build more investor confidence in debt mutual funds. We are committed to launch more such innovative yet simple solutions for our investors," commented Radhika Gupta, CEO, Edelweiss Mutual Fund.
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 Edelweiss NIFTY PSU Bond Plus SDL Index Fund - 2026 NFO will be open for subscription between March 10 to March 16, 2021.