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NFO corner: Birla Sun Life launches Nifty SDL Plus PSU Bond fund

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The fund has a defined maturity date with a target maturity of September 30, 2026, with a diversified portfolio of AAA rated PSU Bonds and SDLs maturing on or before scheme maturity.

NFO corner: Birla Sun Life launches Nifty SDL Plus PSU Bond fund
Aditya Birla Sun Life AMC has launched Nifty SDL Plus PSU Bond Sep 2026 60:40 Index Fund, an open ended scheme tracking the Nifty SDL Plus PSU Bond Sep 2026 60:40 Index. The NFO opens on September 15, 2021 and closes on September 23, 2021.
The fund has a defined maturity date with a target maturity of September 30, 2026, with a diversified portfolio of AAA rated PSU Bonds and SDLs maturing on or before scheme maturity.
A target maturity fund has a specified maturity date that aligns with the maturity date of the bonds it has in its portfolio. This helps such funds provide predictive and stable returns. At maturity an investor will get back their investment proceeds.
Being an index fund, the portfolio will seek to replicate the performance of Nifty SDL Plus PSU Bond Sep 2026 60:40 Index. The portfolio index will comprise of 60 percent SDLs of top 10 states/Union Territories and 40percent of top 10 AAA rated PSU bonds curated on the basis of credit quality and liquidity scores. It will endeavor to hold bonds till their maturity with an aim to provide stable and predictable returns. Subsequently, there will be a quarterly rebalancing and review of the index constituents.
“The passive debt product combines the simplicity of traditional savings instruments with the predictability of returns, quality portfolio of State Government bonds and AAA rated PSU bonds, target maturity period and the flexibility of an open ended scheme, better liquidity and tax benefits,” said A. Balasubramanian, MD & CEO, Aditya Birla Sun Life.
“With yields becoming more attractive and inflation numbers cooling, investors’ real returns have gone up. Investors can potentially benefit from the current steepness in rates with the safety and liquidity of debt funds. In a short and medium term investment horizon, the spreads for 5 years appear attractive, especially for SDLs, compared to G-Secs, mainly driven by higher state borrowings as percentage of overall borrowing. A mix of SDLs and AAA PSU Bonds can provide reasonably better returns along with safety and liquidity of an open ended fund. A roll down strategy is being employed to take benefits of reasonable yields,” he said.
This is Aditya Birla Sun Life Mutual Fund’s first passive offerings in the fixed income space. In addition to this, the fund house has launched 3 new passive funds in the current financial year so far.