Tata Mutual Fund introduces Nifty SDL Plus AAA PSU Bond Dec 60:40 Index Fund
Premium- The Tata Nifty SDL Plus AAA PSU Bond Dec 60: 40 Index Fund is expected to mature around December 2027
Tata Mutual Fund (MF) has launched Tata Nifty SDL Plus AAA PSU Bond Dec 60: 40 Index Fund, an open-ended Target Maturity Index Fund that will be investing in constituents of Nifty SDL Plus AAA PSU Bond Dec 2027 60:40 Index.
Target Maturity Index Funds are passive investments in debt securities that aim to replicate the composition of the underlying index and have a specific maturity date. These funds typically hold securities to maturity and follow a roll-down approach. The Tata Nifty SDL Plus AAA PSU Bond Dec 60: 40 Index Fund is expected to mature around December 2027.
As per the SID (scheme information document) filed with SEBI, out of the two components of the index, in the case of SDLs, issuers of top 6 states/UTs selected based on their outstanding amount maturing during the twelve-month period ending December 31, 2027 are selected. For the PSU Bond component, the top 4 AAA-rated government-owned entities are selected based on their outstanding amount maturing during the twelve-month period ending December 31, 2027.
The scheme falls under the category of relatively high interest rate risk and relatively low credit risk.
The NFO opened for subscription on March 24, 2022 and closes on March 28, 2022. The entry load is nil for the scheme. The exit load will be 0.25 % of the applicable NAV if redeemed on or before 30 days from the date of allotment. The minimum subscription amount is ₹5,000 and in multiples of ₹1 thereafter.
The performance of the scheme will be benchmarked against Nifty SDL Plus AAA PSU Bond Dec 2027 60: 40 Index (TRI) and its fund manager is Amit Somani.
In terms of taxation, when invested for over 3 years, gains 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.
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