Nippon India Mutual Fund launched Nifty G-Sec Sep 2027 Maturity Index Fund recently. The issue was made open for public on November 21 and will close on the last day of November. The scheme will then re-open for continuous sale and repurchase by December 12.
The benchmark index for the mutual fund scheme is Nifty G-Sec Sep 2027 index, and the fund will be managed by Vivek Sharma and Sidharth Deb.
Portfolio constituents:
The securities that are selected are three most liquid G-Secs maturing during the six-month period ending September 30, 2027. Each of these securities has a minimum outstanding amount of ₹25,000 crore.
The scheme portfolio will comprise anywhere between 95 to 100 percent of government securities and the remaining 0-5 percent of money market instruments & cash and cash equivalents.
The fund will screen the index on a semi-annual basis and three government securities will be selected and weights of all the securities will be reset based on original weight method.
The scheme will mature in line with the maturity of the index. It will follow ‘buy and hold’ investment strategy in which existing G-Secs will be held till maturity, subject to semi-annual index rebalancing.
As of now, the index constituents are 7.38% GS 2027 (80.33%), 6.79% GS 2027 (12.19%) and 8.28% GS 2027 (7.48%).
Things to know before investing:
The minimum amount which investors can invest during the new fund offer is ₹1,000 and in multiples of Re 1 thereafter. The index will mature on September 30, 2027
The scheme offers these plans under direct and regular plan — Growth and income distribution cum capital withdrawal (IDCW) plan.
Since the fund scheme will invest in government securities, it is relatively safe, and will follow buy and hold strategy. There is no lock-in since it is a mutual fund, thus giving an option to investors to exit and are tax efficient.
As per the fund risk-o-meter, investors will undertake moderate risk of principal.
