HSBC Mutual Fund launched CRISIL IBX 50:50 Gilt Plus SDL Apr 2028 Index Fund
Premium- Target maturity funds have a fixed maturity and follow a predefined index having securities maturing on or before the maturity date of the index
HSBC Mutual Fund (MF) has launched HSBC CRISIL IBX 50:50 Gilt Plus SDL Apr 2028 Index Fund, an open-ended target maturity Index Fund tracking CRISIL IBX 50:50 Gilt Plus SDL Index- April 2028. Target maturity funds have a fixed maturity and follow a predefined index having securities maturing on or before the maturity date of the index.
As per the fund house, the fund focuses on the rich steepness of the curve vs the shorter end. As per the example given in their presentation, yield pickup between 3 to 6 years (target maturity) is 80 basis points versus only 30 basis points in 6-10 years. It added that the 6-year segment remains a sweet spot for investments as the steepness of this segment over 1-3 year is high. It is also less volatile than 10 years and above segment.
The NFO opens for subscription on March 15, 2022 and closes on March 28, 2022. The entry load and exit load is nil for the scheme. The minimum subscription amount is ₹5,000 per application and in multiples of Re 1 thereafter. The minimum application amount is applicable for switch-ins as well.
The fund will invest in G-Sec and SDL (state development loans) papers with 50% allocation each. The fund manager will buy securities whose maturities are close to the defined maturity date of the index and aims to hold them to maturity.
It is categorised as a relatively high-interest rate risk and relatively low credit risk fund.
In terms of taxation, when invested for over 3 years, these are taxed at 20% after indexation. If held for less than 3 years, the short-term capital gains are taxed at slab rates of the individual.
The performance of the scheme will be benchmarked against CRISIL IBX 50:50 Gilt Plus SDL Index- April 2028 and the fund will be managed by Kapil Punjabi.
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