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New Fund Offer: Aditya Birla Sun Life AMC launches index fund with fixed maturity date, indexation benefit

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Aditya Birla Sun Life AMC Limited has launched Aditya Birla Sun Life Nifty SDL Plus PSU Bond Sep 2026 60:40 Index Fund. It is an open-ended scheme monitoring the Nifty SDL Plus PSU Bond Sep 2026 60:40 Index. The NFO opened on September 15, 2021. It will shut on September 23, 2021.

The new fund has an outlined maturity date with a goal maturity of September 30, 2026, with a diversified portfolio of AAA rated PSU Bonds and SDLs maturing on or earlier than scheme maturity.

Since it’s an index fund its portfolio will search to duplicate the efficiency of Nifty SDL Plus PSU Bond Sep 2026 60:40 Index. The portfolio index will comprise of 60% SDLs of prime 10 states/Union Territories and 40% of prime 10 AAA rated PSU bonds curated on the premise of credit score high quality and liquidity scores, Aditya Birla Sun Life AMC Limited stated in a press release.

The fund will endeavor to carry bonds until their maturity with an purpose to offer steady and predictable returns. Subsequently, there will probably be a quarterly rebalancing and review of the index constituents, it added.

Commenting on the NFO, A. Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC Limited stated, “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.”

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“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 added.

Aditya Birla Sun Life AMC Limited is a subsidiary of Aditya Birla Capital Limited (a major non-bank monetary companies’ conglomerate), and funding supervisor to Aditya Birla Sun Life Mutual Fund (ABSLMF)

With this NFO, Aditya Birla Sun Life Mutual Fund has forayed into passive choices within the fixed earnings area. The AMC has additionally launched three new passive funds within the present monetary year to date.

“As a fund house, we are looking at expanding our offerings in this segment that complements our existing strong presence through our active funds. Our goal is to develop a diverse product bouquet to implement differentiated and thematic investment strategies that consider long-term trends and values. In addition to our existing comprehensive product development strategy, we are also focusing on developing specific product categories such as our passive products in both equity and debt”, stated Balasubramanian.

The AMC stated {that a} goal 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 present predictive and steady returns. At maturity an investor will get again their funding proceeds.

“Since it is a passively managed Index Fund, one can buy and sell any time through the AMC during the tenure of the fund. Indexation is an efficient way to reduce tax on returns by adjusting it for inflation. Indexation allows an investor to adjust buying price of one’s investment with inflation, thus making it more tax efficient. It is applied to long term returns on one’s investments. Higher inflation means higher indexed purchase price, which means lower notional capital gains and lower tax,” the assertion stated.

Long time period capital positive factors are eligible for taxation at 20% publish indexation in debt mutual funds if held greater than three years. The portfolio of ABSL Nifty SDL plus PSU Bond Sep 2026 60:40 Index Fund is designed to mature on thirtieth September 2026 and presently affords 5 year indexation benefit for buyers coming in earlier than thirtieth Sept 2021.

Disclaimer: Investing in Mutual Funds is topic to market dangers. Please seek the advice of your monetary advisor earlier than making any funding choice.

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