The IDFC Gilt 2027 Index Fund will mature on June 30, 2027, and the IDFC Gilt 2028 Index Fund will mature on April 05, 2028.
IDFC Mutual Fund has launched two innovative fixed income open-end funds – the IDFC Gilt 2027 Index Fund and the IDFC Gilt 2028 Index Fund.
These are maturity index funds that will invest in government securities and treasury bills
that constitute the CRISIL Gilt 2027 Index and Gilt 2028 Index respectively.
Target Maturity Funds have a defined maturity date, unlike regular open-end mutual funds that remain open indefinitely. Upon maturity, the net asset value
of these funds will be paid back to unitholders. Additionally, IDFC’s Gilt Index Funds will invest only in sovereign rated instruments – which are guaranteed by the Government of India – thereby reducing any credit risk.
These funds will also steadily reduce the residual maturity of investments over the holding period, thereby reducing duration risk or the fund’s sensitivity to a change in interest rates.
Both the funds, according to Vishal Kapoor, CEO, IDFC Asset Management Company, are ideally suited for investors seeking high quality investments with a matching investment time horizon. “The funds are positioned to benefit from the current steep yield curve, and we believe that six-year and seven-year government securities are relatively attractive versus ultrashort tenor securities as well as corporate bonds when compared to average spreads over five years,” he says.
Both funds will offer a daily purchase and redemption facility. The minimum investment amount is ₹ 5,000, and there will be no exit load on redemptions.
IDFC AMC is one of India’s top 10 asset managers with an average asset under management of around ₹ 1.20 trillion.