HDFC Mutual Fund announced the launch of the HDFC NIFTY SDL Plus G-Sec Jun 2027 40:60 Index Fund, an open-ended index fund scheme tracking the NIFTY SDL Plus G-Sec Jun 2027 40:60 Index constituents.
The scheme opened for public subscription on March 13, 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 Plus G-Sec Jun 2027 40:60 Index. The fund is best for investors seeking returns that are commensurate (before fees and expenses) with the performance of the NIFTY SDL Plus G-Sec Jun 2027 40:60 Index, subject to tracking differences over the long term.
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 generate returns that are commensurate (before fees and expenses) with the performance of the NIFTY SDL Plus G-Sec Jun 2027 40:60 Index (the underlying index), subject to tracking difference. The scheme, however, does not guarantee/indicate any returns.
Q. How may one invest in this fund?
Investors can invest under the scheme with a minimum investment of ₹100 per plan/option and in multiples of any amount thereafter. There is no upper limit for investment.
The scheme offers a Regular Plan and a Direct Plan.
Each plan offers a Growth Option Only. The plans under the scheme will have a common portfolio. The AMC reserves the right to introduce further options as and when deemed fit.
Under normal circumstances, the asset allocation of the scheme will be as follows:
|Types of Instruments||Minimum Allocation (% of Total Assets)||Maximum Allocation (% of Total Assets)||Risk Profile|
|Government Securities/SDL, TREPS on Government Securities/Treasury bills||95||100||Low to Medium|
|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 against the NIFTY SDL Plus G-Sec Jun 2027 40:60 Index. The scheme will invest in the constituents of the Underlying Index as per the allocation table and as permitted by SEBI from time to time. Thus, the said benchmark is most suited for comparing the performance of the Scheme. The Trustee reserves the right to change the benchmark for the performance of the scheme in conformity with the investment objectives and appropriateness of the benchmark subject to SEBI (MF) Regulations, and other prevailing guidelines if any by suitable notification to the investors to this effect.
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?
Vikash Agarwal will take care of the investments in this 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.