Publish Date:
Aditya Birla Sun Life Mutual Fund has launched, an open-ended target maturity fund, namely Aditya Birla SL Crisil IBX Gilt June 2027 Index Fund.
This Scheme aims to capitalize on current opportunities in G-secs, offering the potential for capital gains. And in doing so, the fund exposes investors to moderate interest rate risk and low credit risk.
The Scheme shall invest 98% in Government securities (G-secs) and 2% in Treasury bills (T-bills). During normal circumstances, the Scheme shall allocate 95% to 100% of its total assets in instruments forming part of the CRISIL IBX Gilt Index – June 2027, and up to 5% in debt/money market Instruments, cash and cash equivalents. The eligible period for inclusion of securities is those maturing between January 1, 2027, to June 30, 2027.
The Scheme will not invest in overseas securities, derivatives, securitized debt instruments, repo/reverse repo transactions in corporate debt securities, unrated debt instruments, debt instruments having structured obligations/credit enhancements, Credit Default Swaps (CDS), REITs and InvITs, units of another Scheme managed by Aditya Birla Sun Life Asset Management Company or in any other Scheme of any other mutual fund house and debt instruments. Moreover, the Scheme does not engage in short-selling.
The investment objective of Aditya Birla Crisil IBX Gilt June 2027 Index Fund is to generate returns corresponding to the total returns of the securities as represented by the CRISIL IBX Gilt Index – June 2027 before expenses, subject to tracking errors. Note, that the Scheme does not guarantee/indicate any returns. There is no assurance or guarantee that the investment objective will be achieved.
In other words, the Scheme aims to measure its performance against the Crisil IBX Gilt June 2027 Index, subject to a tracking error. The constituents of this index are G-secs maturing in 2027 and 91-day T-bills, which carry high liquidity and low risk.
Table: Constituents of Crisil IBX Gilt June 2027 Index
Data as of May 1, 2024
Aditya Birla Crisil IBX Gilt June 2027 Index Fund follows a passive investment strategy while it aims to lock in at current high yields so as to potentially earn capital gains over a longer duration.
This Scheme will be managed by Mr. Bhupesh Bameta and Mr. Sanjay Godambe, the designated fund managers of the Scheme.
Mr. Bhupesh Bameta has experience of over 16 years in the financial services industry. He holds a bachelor's degree in technology -- B.Tech from (IIT Kanpur) – and is a CFA Charterholder. Mr. Bameta manages various other debt mutual fund schemes at Aditya Birla Sun Life Mutual Fund.
Mr. Sanjay Godambe has over 26 years of experience in the area of finance, mutual fund dealing and its related activities (including fixed-income dealing). He is a commerce graduate (B.Com) and has done a Diploma in Finance Management. Along with Mr. Bameta, he manages several other schemes at the fund house.
At present India’s strong economic growth and RBI’s resolve to tame inflation amidst geopolitical tensions have pushed up G-sec yields.
Moreover, effective June 2024 G-secs will be included in JP Morgan’s GBI-EM index series. This inclusion, along with expected additions from Bloomberg and FTSE, could significantly boost the demand for G-Secs – it could encourage Foreign Portfolio Investors (FPIs) to invest in them.
Given that interest rates are at the peak and G-sec yields are higher, is creating an opportunity for capital appreciation as interest rates and yields come down, thus making it an advantageous proposition.
Also, with fixed maturity dates, high liquidity, and a low minimum investment requirement, these funds offer a practical means of navigating the dynamic G-sec landscape.
[Read: Best Debt Mutual Fund Categories for 2024]
Aditya Birla Crisil IBX Gilt June 2027 Index Fund is available for subscription during the New Fund Offer period from May 22, 2024, to June 4, 2024, and has both Regular Plan and Direct Plan options for investment.
The minimum investment amount is Rs 100/- and in multiples of Re 1 thereafter during the NFO period.
Note the fund is suitable for investors looking for looking to capitalise on the opportunity of higher G-sec yields, mitigate the credit risk, and potential capital gains.
To know more about Aditya Birla Crisil IBX Gilt June 2027 Index Fund download and read this.
Happy Investing!