ABSL MF launches ABSL Nifty SDL Plus PSU Bond Sep 2026 60:40 Index Fund
Aditya Birla Sun Life AMC, a subsidiary of Aditya Birla Capital, and investment manager to Aditya Birla Sun Life Mutual Fund (ABSLMF) announced the launch of Aditya Birla Sun Life Nifty SDL Plus PSU Bond Sep 2026 60:40 Index fund. It is an open-ended scheme tracking the Nifty SDL Plus PSU Bond Sep 2026 60:40 Index. The NFO opens on September 15, 2021, and closes on September 23, 2021.
The fund has a defined maturity date with a target maturity of September 30, 2026, with a diversified portfolio of AAA-rated PSU Bonds and State Development Loans (SDL) maturing on or before scheme maturity. Since it is an index fund its portfolio will seek to replicate the performance of Nifty SDL Plus PSU Bond Sep 2026 60:40 Index. The portfolio index will comprise 60 per cent SDLs of top 10 states or Union Territories and 40 per cent of top 10 AAA-rated PSU bonds curated on the basis of credit quality and liquidity scores. It will endeavor to hold bonds till their maturity with an aim to provide stable and predictable returns. Subsequently, there will be a quarterly rebalancing and review of the index constituents.
With yields becoming more attractive and inflation numbers cooling, investors’ real returns have gone up. Investors can potentially benefit from the current steepness in rates with the safety and liquidity of debt funds. In a short and medium-term investment horizon, the spreads for 5 years appear attractive, especially for SDLs, compared to G-Secs, mainly driven by higher state borrowings as a percentage of overall borrowing. A mix of SDLs and AAA PSU Bonds can provide reasonably better returns along with the safety and liquidity of an open-ended fund. A roll-down strategy is being employed to take benefits of reasonable yields.
A target maturity fund has a specified maturity date that aligns with the maturity date of the bonds it has in its portfolio. This helps such funds provide predictive and stable returns. At maturity, an investor will get back their investment proceeds. Since it is a passively managed Index Fund, one can buy and sell at any time through the AMC during the tenure of the fund. Long term capital gains are eligible for taxation at 20 per cent post indexation in debt mutual funds if held for more than three years. The portfolio of ABSL Nifty SDL plus PSU Bond Sep 2026 60:40 Index Fund is designed to mature on 30th September 2026 and currently offers five-year indexation benefit for investors coming in before 30th Sept 2021.