Edelweiss MF expands its portfolio of target maturity index funds

The Edelweiss CRISIL IBX 50:50 Gilt Plus SDL September 2028 Index Fund will be open for subscription between 1 and 7 November. The scheme is an open-ended target maturity index fund investing in constituents of CRISIL IBX 50:50 Gilt Plus SDL Index – Sep 2028.

“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,” said Radhika Gupta, managing director and chief executive officer, Edelweiss Asset Management Ltd.

According to the fund house, following the success of Edelweiss AMC Bharat Bond ETF, a total of 30 target maturity funds have been launched since 2019 by 11 different AMCs with their AUM (assets under management) crossing ₹1.15 trillion as on 30 September 2022. Edelweiss AMC has reached an AUM of more than ₹60,000 crore (as on 30 September) in a little over two years in the passive debt category.

The fund will come with a minimum investment amount of ₹5,000, and will have a defined maturity date of Edelweiss CRISIL IBX 50:50 Gilt Plus SDL September 2028 Index Fund.

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 portfolio of eligible securities invested by the scheme will have, in aggregate, similar quantitative characteristics like that of the underlying index.

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. The funds invest only in constituents that are eligible as per the index methodology and investment objective of the schemes.