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Edelweiss Asset Management Company has launched a new fund offer of Nifty PSU Bond Plus SDL Index Fund – 2026, a one of its kind passively managed index fund that will invest in AAA-rated PSU bonds and State Development Loans. The NFO opens on Wednesday and closes on March 16.
The fund will have a defined maturity of April 30, 2026. The fund will aim to hold the bonds till maturity in order to provide stability and visibility of returns to investors. Taxed at 20 per cent post indexation, this fund will be more tax efficient as compared to traditional avenues.
Radhika Gupta, CEO, Edelweiss Mutual Fund said post the success of Bharat Bond last year, there has been significant rise in popularity of target maturity debt funds among investors.
Higher yields
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, she said.
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 per cent each. Exposure to any single company’s bonds or loans would be capped at 15 per cent of the corpus. Subsequently, there will be a quarterly rebalancing and review of the index constituents, said the fund house.
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