ICICI Pru MF and Aditya Birla MF launch index funds tracking Nifty SDL Plus PSU Bond index
15 Sep 2021
NEW DELHI: Aditya Birla Sun Life Mutual Fund and ICICI Prudential Mutual Fund on Wednesday launched separate index funds that will track Nifty SDL Plus PSU Bond Sep 2026 60:40 Index, which comprises bonds issued by state governments and PSUs.
The NFO for Aditya Birla’s fund will open on September 15 and close on September 23. The same for ICICI Prudential’s fund will open on September 16, and close on September 27.
Nifty SDL Plus PSU Bond Sep 2026 60:40 Index seeks to measure the performance of the portfolio of SDLs (state development loans) and AAA rated bonds issued by government owned entities maturing during the twelve-month period ending September 30, 2026.
Aditya Birla said its portfolio index will comprise 60 per cent SDLs of top 10 states and Union Territories and 40 per cent of top 10 AAA rated PSU bonds curated on the basis of credit quality and liquidity scores.
“It will endeavor to hold bonds till their maturity with an aim to provide stable and predictable returns. Subsequently, there will be a quarterly rebalancing and review of the index constituents,” it added.
This index fund marks Aditya Birla Sun Life Mutual Fund’s foray into passive offerings in the fixed income space. In addition to this, the fund house has launched three new passive funds in the current financial year so far.
ICICI Prudential said bonds that will be a part of this portfolio will be maturing during the six-month period ending September 30, 2027. The index will be reviewed every quarter and the weights of each issuer in the index will be capped at 15 per cent.
“This is suitable for investors seeking exposure to a fixed income instrument and for investors having a medium-term investment horizon in line with the index’s maturity period,” said Chintan Haria, Head – Product Development & Strategy, ICICI Prudential AMC.
These funds can be a good option to generate fixed income with guaranteed safety of capital. It provides exposure to government backed instruments like PSUs & SDLs. If held for more than 36 months, tax is applicable at 20 per cent with indexation (excluding applicable surcharge and cess).