DSP Mutual Fund launched DSP CRISIL SDL Plus G-Sec Apr 2033 50:50 Index Fund under its index fund category. The issue was made open to the public on January 10 and will close on January 19, 2023.
It is an open ended target maturity index fund investing in the constituents of CRISIL SDL Plus G-Sec Apr 2033 50:50 Index. This is a scheme with relatively high interest rate risk and relatively low credit risk.
As per the fund house, the new scheme will be managed by Laukik Bagwe who has an experience of over 21 years and Vikram Chopra who has over 20 years of experience.
The benchmark index for the mutual fund scheme is CRISIL SDL Plus G-Sec Apr 2033 50:50 Index Fund. The minimum investment amount is Rs. 500 and in multiples of any amount thereafter.
“The investment objective of the scheme is to track the CRISIL SDL Plus G-Sec Apr 2033 50:50 Index by investing in Government Securities and SDLs, maturing on or before April, 2033 and seeks to generate returns that are commensurate (before fees and expenses) with the performance of the underlying index, subject to tracking error.”
“However, there is no assurance that the objective of the scheme will be achieved. The scheme does not assure or guarantee any returns,” the fund house said in a media release.
Additionally, the portfolio is proposed to be invested in highly liquid Government Securities (G-Sec) and State Development Loans (SDLs) from states with good financial position and high liquidity in a 50:50 ratio.
Who should invest?
- Investors who are seeking visibility of returns over 10 years by parking money at relatively higher YTM.
- Are seeking an alternative to fixed deposits which can provide better post tax returns.
- Are expecting yields to fall thereby benefiting from MTM gain + Higher accrual.
Sandeep Yadav, Head – Fixed Income, DSP Investment Managers, says “Since the fund will only invest in Government securities of centre and states maturing around 2033, it provides a good opportunity for a risk aware investor."
“Moreover, interest rates have increased significantly in 2022. The higher rates provide a better entry level for investors” he added.