ICICI Prudential Mutual Fund has launched ICICI Prudential Nifty SDL Sep 2026 Index Fund, which is a target maturity index fund. It will invest in the constituents of Nifty SDL Sep 2026 Index.
“In a rising interest rate scenario, investors looking for fixed duration returns within a specific maturity bucket can consider investing in Target Maturity Index Funds. 15 states/UTs are selected based on the highest composite score based on outstanding amount score and liquidity score calculated as on September 30, 2022 for SDLs maturing during the six-month period ending September 30, 2026,” said Chintan Haria, Head, Product Development and Strategy, ICICI Prudential AMC.
Target Maturity Index Funds are open-ended passively managed funds that replicate the underlying debt index having a specific maturity date. The constituents of the index are generally hold-till-maturity.
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The New Fund Offer (NFO) opened on December 15, 2022 and it will be available till December 20, 2022
ICICI Prudential Nifty SDL Sep 2026 Index Fund aims to provide returns that correspond to the total return of the underlying index, subject to tracking errors, the AMC said in a statement.
What are SDLs?
State Development Loans (SDLs) are bonds that are issued by the State Governments to manage their state finances and fund their fiscal deficit. SDLs are similar to Government Securities (G-Sec) issued by the Government of India. Hence, SDLs provide one of the highest level of safety in terms of credit risk.
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One of the key features of the target maturity index fund is that it largely adopts a hold-to-maturity approach as it replicates the underlying index which constitutes State Development Loans of various States or Union Territories of India or G-Secs depending on the type of the offering chosen. If held for more than three years, investors get the benefit of indexation which enhances the post-tax returns of those in higher tax brackets.
(Mutual fund investments are subject to market risks. There is no assurance or guarantee that a fund’s objectives will be met. Please consult your financial advisor before investing)