UTI Mutual Fund announced the launch of the UTI NIFTY SDL Plus AAA PSU Bond Apr 2028- 75:25 Index Fund, an open-ended income fund investing in constituents of theNifty SDL Plus AAA PSU Bond Apr 2028 75:25 Index.
The scheme opened for public subscription on February 24, 2023, and will close on March 02, 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 UTI NIFTY SDL Plus AAA PSU Bond Apr 2028- 75:25 Index Fund. 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 track the Nifty SDL Plus AAA PSU Bond Apr 2028 75:25 Index by investing in AAA-rated PSU Bonds and SDLs, maturing on or before April 2028, subject to tracking errors. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved.
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 ₹5000 and in multiples of Re 1, thereafter. The scheme offers a Regular Plan and Direct Plan. Subsequent minimum investment under a folio is Rs.1,000/- and in multiples of Re 1/- thereafter with no upper limit.
The minimum SIP amount for daily, weekly and monthly SIP is Rs.500/- and in multiples of Re.1/, thereafter. The minimum SIP amount for quarterly SIP is Rs. 1,500/- and in multiples of Re.1/, thereafter.
Both the plans offer following options:
- Growth option
- Payout of income distribution cum capital withdrawal option (Payout of IDCW option)
In case where no option is exercised by the applicant/unitholder at the time of making his investment or subsequently, he will be deemed to be under the Growth option and his application will be processed accordingly.
Under normal circumstances, the investment range would be as follows:
| Types of Instruments | Indicative Allocation (% of Total Assets) | Risk Profile | |
| State Development Loans (SDLs) representing the SDL portion of Nifty SDL Plus AAA PSU Bond Apr 2028 75:25 Index | Minimum | Maximum | |
| Bonds issued by PSU* and other Government organizations representing the bonds portion of Nifty SDL Plus AAA PSU Bond Apr 2028 75:25 Index | 95% | 100% | Medium to High |
| Money Market instruments including Triparty Repo, G-Sec/SDLs^, T-Bills and units of Overnight & Liquid Mutual Fund Schemes | 0% | 5% | Low |
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 %) |
| IDFC Banking & PSU Debt Fund | 5.75 | 7.60 |
| ICICI Prudential Banking & PSU Debt Fund | 5.99 | 7.20 |
| Aditya Birla Sun Life Banking & PSU Debt Fund | 5.88 | 7.34 |
| Franklin India Banking & PSU Debt Fund | 5.02 | 7.19 |
| PGIM India Banking & PSU Debt Fund | 5.45 | 7.13 |
| DSP Banking & PSU Debt Fund | 5.43 | 6.95 |
| Source: MoneyControl | ||
Q. How will the scheme benchmark its performance?
Nifty SDL Plus AAA PSU Bond Apr 2028 75:25 Index is the benchmark for UTI Nifty SDL Plus AAA PSU Bond Apr 2028 75:25 Index Fund. The performance of the scheme is benchmarked to the Total Return Variant of the benchmark index which is the Nifty SDL Plus AAA PSU Bond Apr 2028 75:25 Index. This benchmark has been chosen on the basis of the investment pattern/objective of the scheme and the composition of the index.
Q. How do investors seek redemption from the scheme?
The minimum redemption amount is Rs.1,000/- and in multiples of Re.1/- thereafter. In case of partial redemption, if the balance amount held in the unitholder’s folio/account under the Plan/Option of the Scheme is less than the minimum investment amount, then the transaction shall be treated as all units redemption and the entire balance of available units in the folio/account of the unitholder shall be redeemed.
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 also “Zero”.
Q. Who will manage this scheme?
Sunil Patil is the dedicated Fund Manager of UTI Nifty SDL Plus AAA PSU Bond Apr 2028 75:25 Index 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.
