Baroda BNP Paribas Mutual Fund announced the launch of the Baroda BNP Paribas NIFTY SDL December 2028 Index Fund, an open-ended index fund scheme tracking the NIFTY SDL December 2028 Index constituents.
The scheme opened for public subscription on March 14, 2023, and will close on March 21, 2023, and will re-open for continuous sale and repurchase within five business days from the date of allotment of units under the new fund offer (NFO).
Q. What kind of mutual fund scheme is this?
This kind of open-ended index fund scheme aims to generate returns commensurate with the performance of the NIFTY SDL December 2028 Index. The fund is best for investors seeking income for the target maturity period.
This fund involves a relatively high-interest rate risk and relatively low credit risk. However, there is no assurance that the scheme’s investment objective will be realized.
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to provide investment returns closely corresponding to the total returns of the securities as represented by the Nifty SDL December 2028 Index before expenses, subject to tracking errors, fees and expenses.
However, there is no assurance that the objective of the scheme will be realised and the scheme does not assure or guarantee any returns.
Q. How may one invest in this fund?
Investors can invest under the scheme with a minimum investment of ₹5000 per plan/option and in multiples of any amount thereafter. There is no upper limit for investment.
Each plan offers a Growth Option and an Income Distribution cum Capital Withdrawal (IDCW) Option. Under normal circumstances, the asset allocation of the scheme will be as follows:
|Type of Instruments||Minimum Allocation (% of Net Assets)||Maximum Allocation (% of Net Assets)||Risk Profile|
|Debt instruments comprising of Nifty SDL December 2028 Index||95||100||Low to Medium|
|Cash & Money Market instruments and Units of liquid and debt mutual fund schemes||0||5||Low to Medium|
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such index funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
|Name of the index fund||Yield to Date (YTD)|
|ICICI Prudential Nifty SDL Sep 2026 Index Fund||0.66|
|Axis Nifty SDL September 2026 Debt Index Fund||0.70|
|Aditya Birla Sun Life Crisil IBX AAA Jun 2023 Index Fund||1.27|
|Kotak Nifty SDL Jul 2026 Index Fund||0.68|
|IDFC CRISIL IBX 90:10 SDL Plus Gilt||0.70|
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked to the performance of the NIFTY SDL December 2028 Index.
Q. Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” will also be “Nil”.
Q. Who will manage this scheme?
Mayank Prakash shall be the designated fund manager for the scheme.
Q. Does the fund contain any inherent risk?
The scheme involves “Moderate Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to moderate risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.