The objective of these funds is to provide predictive and stable Return. Since both these are passively managed index funds, one can buy and sell through the AMC at any time during the tenure of the fund.
Corporate trainer and author Joydeep Sen says, “Target maturity funds are a good investment option. Index funds are better than ETFs in this space because they give you a relative advantage of liquidity – you can buy/redeem from AMCs.”
ICICI Prudential Mutual Fund has launched ICICI Prudential PSU Bond Plus SDL 40:60 Index Fund. It is a Targeted Maturity Index scheme investing in the components of Nifty PSU Bond Plus SDL Bond September 2027 40:60 Index. NS NFO Opens on 16 September and closes on 27 September.
In the portfolio, investments in AAA-rated bonds issued by government-owned entities and SDLs will be in the ratio of 40:60. The bonds that will be part of this portfolio will mature during the six-month period ending September 30, 2027. The index will be reviewed quarterly and each issuer in the index will be weighted at 15%.
“ICICI Prudential PSU Bond Plus SDL Bond September 2027 40:60 Index is a target maturity open ended fund that offers investors exposure to a portfolio of 8 PSU Bonds issued by Government owned entities and 20 SDLs issued by States/UTs. Is. Chintan Hariya, Head of Product Development & Strategy, ICICI Prudential AMC, said, “It is suitable for investors who wish to invest in a fixed income instrument and for investors with medium-term investment horizons commensurate with the maturity of the index. .
Aditya Birla Sun Life Mutual Fund Also announced the launch of Aditya Birla Sun Life Nifty SDL Plus PSU Bond September 2026 60:40 Index Fund. It is an open ended scheme tracking the Nifty SDL Plus PSU Bond September 2026 60:40 Index. NFO opens on 15th September and closes on 23rd September.
The fund house says the fund has a defined maturity date with a target maturity of September 30, 2026, with a diversified portfolio of AAA rated PSU bonds and SDLs that mature on or before the maturity of the scheme. According to the fund house, the portfolio index will comprise 60% of SDLs from top 10 states/UTs and 40% of top 10 AAA rated PSU bonds curated on the basis of credit quality and liquidity scores.
“The Passive Loan product combines the simplicity of traditional savings instruments with the flexibility, better liquidity and tax benefits of predicting returns, a quality portfolio of State Government Bonds and AAA Rated PSU Bonds, target maturity periods and an open-ended scheme. Real returns to investors have increased due to more attractive yields and cooling of inflation data. With the safety and liquidity of debt funds, investors can potentially benefit from the current rise in rates. In the short and medium term investment horizon, spreads for 5 years appear attractive, especially for SDLs, as compared to government securities, which are primarily driven by higher state borrowings as a percentage of overall borrowings . A mix of SDL and AAA PSU bonds can provide better returns along with the safety and liquidity of an open-ended fund. Aditya Birla Sun Life AMC MD and CEO A. Balasubramaniam says, ‘The strategy of roll-down is being adopted to take advantage of reasonable returns.’
Lastly, should you invest in these schemes? “Both these funds have a good quality portfolio with SDL and AAA rated PSU bonds. If you are looking to invest for 5-6 years and your investment horizon coincides with the maturity of the fund, you can opt for these schemes. You can see it. You can withdraw your money. Invest before maturity as well as unlike FMP it is an open-ended fund. One must assess whether the fund matches your investment strategy and risk appetite ,” suggests Joydeep Sen.