Nippon India Mutual Fund announced the launch of the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund, an open-ended target maturity index fund investing in constituents of the Nifty G-Sec Oct 2028 Index.
The scheme opened for public subscription on February 20, 2023 and will close on February 28, 2023. The scheme will re-open for continuous sale and repurchase, not later than March 10, 2023.
Q. What kind of mutual fund scheme is this?
This is a kind of debt fund instrument that aims to generate returns that are commensurate with the performance of the Nifty G-Sec Oct 2028 Index, subject to tracking differences over the long term. 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 earn returns from investments in government securities (G-Secs) representing the G-Sec portion of the Nifty G-Sec Oct 2028 Index - 95-100%, the remaining being in money market instruments & cash and cash equivalents - 0-5%. This open-ended fund is of relatively high-interest rate risk and relatively low credit risk.
Q. How may one invest in this fund?
The scheme offers units of Rs. 10 each. Investors can invest under the scheme with a minimum investment of ₹1000 and in multiples of Re 1, thereafter. The scheme offers a Regular Plan and Direct Plan. Each plan offers Growth Option only though the fund house reserves the right to introduce further options as and when deemed fit.
The scheme offers the following plans/options under direct plan and regular plan:
- Growth Plan
- Growth Option
- Income Distribution cum Capital Withdrawal Plan
- Payout Option
- Reinvestment Option
Direct plan is only for investors who purchase /subscribe to units in a scheme directly with the fund. However, the distribution of IDCWs will be subject to the availability of distributable surplus.
Q. Are there similar mutual funds in the market?
Many asset management companies have launched such funds in the past. Some of them include:
| Name of the fund | Three-year returns (in %) | Five-year returns (in %) |
| HDFC Index Fund - S&P BSE Sensex Plan | 14.77 | 13.43 |
| LIC MF S&P BSE Sensex Index Fund | 14.66 | 13.17 |
| UTI Nifty 50 Index Fund | 14.87 | 12.57 |
| IDBI Nifty Index Fund | 14.57 | 12.33 |
| Source: MoneyControl | ||
Q. How will the scheme benchmark its performance?
The performance of the scheme is measured against the Nifty G-Sec Oct 2028 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.
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” is applicable in the respective transferor and the transferee scheme at the time of enrolment/registration of STP will be applicable.
Q. Who will manage this scheme?
Vivek Sharma will be managing the investments in this fund.
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 at moderate risk. However, investors should consult their financial advisors, if in doubt about whether the product is suitable for them.
