Edelweiss NIFTY PSU Bond Plus SDL Index Fund 2026: Edelweiss Asset Management Company Limited has announced the launch of Edelweiss NIFTY PSU Bond Plus SDL Index Fund – 2026. Passively managed, is a very first of its sort index fund which will invest in AAA rated PSU Bonds as nicely as State Development Loans (SDL).
Edelweiss mentioned in a statement that the new Edelweiss NIFTY PSU Bond Plus SDL Index Fund – 2026 is a Debt Index Fund with six-year maturity. While this solution will also see volatility, there will be no interest price threat for these who strategy to hold till maturity. “If you give it the time needed, this passively managed corpus should score over rival debt instruments due to low costs and high visibility of returns,” the AMC mentioned.
What are the dangers with rival debt instruments?
Radhika Gupta, MD & CEO, Edelweiss Asset Management, told FE Online that current debt funds, simply because of their open-ended nature, carry duration threat even if you keep invested for a lengthy period. Hence, returns hold fluctuating due to alterations in interest prices, particularly in a higher duration debt fund.
Volatility vs Interest price threat: How this new fund give addresses each?
Gupta mentioned that in target maturity funds, duration reduces as the fund approaches its maturity. This offers superior visibility of returns. Even if interest prices alter in involving, it will have no effect on returns for investors who keep invested till the finish of maturity.
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Who ought to invest in this fund?
Investors who want to invest for 3 to 5 years and do not want interest price fluctuations to effect their returns might invest in this fund. Also, investors who want to look beyond standard investment avenues to earn improved post-tax returns can invest in this fund as it delivers indexation advantage, mentioned Gupta.
How considerably can you invest?
Edelweiss mentioned that one can invest as low as Rs 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 to provide stability and visibility of returns to investors. The AMC also mentioned that taxed at 20 per cent post indexation, this fund will be more tax effective as compared to standard avenues.
When can you invest in this fund?
The Edelweiss NIFTY PSU Bond Plus SDL Index Fund – 2026 NFO will be open for subscription involving March 10 to March 16, 2021.
According to Edelweiss, its new fund give is a very first ever, open-ended, Target Maturity Index Fund that will predominantly invest in the constituents of NIFTY PSU Bond Plus SDL 50:50 Index. The proportion of investments of AAA PSU Bonds and SDLs will be equally divided with a weightage of 50% each and every.
(Please seek the advice of your monetary advisor just before investing)