Edelweiss Asset Management Limited today (October 31) announced the launch of a new Target Maturity Index Fund – Edelweiss CRISIL IBX 50:50 Gilt Plus SDL September 2028 Index Fund. It will invest in a mix of Indian Government Bonds (IGBs) and State Development Loans (SDLs).
“Target Maturity Index Funds are one of the prudent fixed income options for investors to lock in investments at current yields. With the successful launch of various debt fund options including target maturity funds over the past two years, we are now the largest player managing long-term fixed-income money for investors. Our aim is to provide a wide range of fixed income options for investors with steady returns while investing in highest rated debt instruments,” Radhika Gupta, MD & CEO, Edelweiss Asset Management Limited, said while commenting on the launch of the new fund.
The Edelweiss CRISIL IBX 50:50 Gilt Plus SDL September 2028 Index Fund will be open for subscription between 1st to 7th November 2022. The scheme is open-ended target maturity Index Fund investing in the constituents of CRISIL IBX 50:50 Gilt Plus SDL Index – Sep 2028.
Edelweiss CRISIL IBX 50:50 Gilt Plus SDL September 2028 Index Fund will come with an investment amount that is as low as Rs.5000. It will have a defined maturity date. The scheme will follow a Buy and Hold investment strategy in which existing bonds will be held until maturity unless sold for meeting redemptions, dividend payment rebalancing requirements or optimizing the portfolio construction process.
The AMC said that the portfolio of eligible securities invested by the Scheme will have, in aggregate, similar quantitative characteristics to that of the underlying index.
What are TMFs?
Target maturity ETFs and index funds are open-ended debt funds with a specified maturity date that aligns with the expiry date of the bonds they have in their portfolios. These funds are simple and transparent investment vehicles that allow investors to have liquidity, stability, and predictability of returns along with lower tax compared to traditional instruments like fixed deposits.
TMFs invest only in constituents that are eligible as per the index methodology and investment objective of the schemes.
Since the success of Edelweiss AMC Bharat Bond ETF, as many as 30 target maturity funds have been launched since 2019 by 11 different AMCs with their AUM crossing Rs. 1.15 Lakh crores (as of 30th September 2022).
Edelweiss AMC has emerged as a leader in the Passive Debt Category, reaching an AUM of over Rs 60,000 crores (as of 30th September 2022) in a little over 2 years. This is more than 52% of the total industry’s AUM with 10 different target maturity offerings.