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NEW DELHI: DSP Investment Managers has announced the launch of DSP Nifty SDL Plus G-Sec Jun 2028 30:70 Index Fund, an open-ended target maturity index fund, which will mature after about six years in June 2028.
The portfolio will be invested only in sovereign securities with a 70:30 split between government securities (G-Sec) and state development loans (SDLs), respectively, in line with the Nifty SDL Plus G - Sec Jun 2028 30:70 Index.
The portfolio has dual filters for selecting SDLs. Instead of just applying a liquidity filter, there is an additional quality filter of low leverage. This quality filter is based on each state’s GDP in proportion to its total liabilities and the top 10 states/union territories with the best quality scores will be selected.
The portfolio will have a combination of highly liquid G-Secs and a selective list of SDLs with low leverage and high liquidity, all which are maturing during the 12-month period ending 30 June 2028.
As per the asset management company, the fund offers investors the potential of relatively stable and predictable returns.
Investors who subscribe during the new fund offer and remain invested till the defined maturity can get a total of seven years of Indexation benefit.
The new fund offer opened for subscription on 11 March and will close on 17 March.
“About 70% of the investment in the fund is in G-Secs. The spreads between G-Sec and SDL is amongst the lowest ever. At such low spreads, it makes sense to have more investment in G-Secs than SDLs, given the relatively safer risk profiles of G-Secs. Also, we are of the view that the yield curve’s rise is steep till 2028, and after that its rise is relatively less. Since the annual spreads increase till 2028 and then flatten, the six-year point is the attractive point for a predictable passive strategy." says Sandeep Yadav, head-fixed income, DSP Investment Managers.
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