HDFC AMC on Friday launched Nifty G-Sec Jun 2027 Index Fund. The scheme will remain open for investors till December 8.
For investors, the minimum subscription amount is ₹100 and any amount thereafter. The fund scheme has both regular and direct plans with growth option only. The investment objective of the Scheme is to generate returns that align with the performance of the Nifty G- Sec Jun 2027 Index (Underlying Index), subject to tracking difference.
Portfolio constituents
The scheme will invest in money market instruments including but not limited to commercial papers, commercial bills, usance bills, treasury bills, government securities having an unexpired maturity up to one year, tri-party repos on govt securities or treasury bills, certificates of deposit, permitted securities under a repo/ reverse repo agreement, and any other instruments as may be permitted.
The mutual fund scheme is target maturity date index fund and it will be passively managed that will employ an investment approach designed to track the performance of the underlying index.
Generally, the scheme will follow ‘buy and hold’ investment strategy in which existing government securities will be held till maturity unless sold for meeting redemptions requirement or to rebalance the portfolio.
During normal circumstances, the scheme’s exposure to money market instruments will be in line with the asset allocation table. However, in case of maturity of securities in the scheme portfolio, the reinvestment will be in line with the index methodology.
Scheme index
The scheme will invest in the constituents of the underlying index i.e. Nifty G-Sec June 2027 Index as permitted by SEBI from time to time. So, the benchmark is most suited for comparing the performance of the scheme.
To select G-Secs to become part of the index, five most liquid G- Secs maturing during the twelve-month period ending June 30, 2027 will be chosen based on the aggregate trading value. It will also be ensured that the securities have a minimum outstanding amount of ₹25,000 crore.
It will be seen that index is reviewed at the end of each calendar quarter with data cut-off date being nine working days before last working day of calendar quarter.
The underlying index seeks to measure the performance of portfolio of government securities maturing during twelve months period ending June 30, 2027.
The tentative portfolio using data cut-off date of October 7, 2022 includes 7.38 percent GS 2027, 6.79 percent GS 2027, 8.24 percent GS 2027, 8.15 percent GS 2026 and 5.74 percent GS 2026.
The scheme will be managed by Vikash Agarwal. The minimum target amount to be raised during the NFO period will be ₹10 crore.
