Axis Mutual Fund is targeting to garner Rs 500 crore from the CPSE Plus SDL debt index fund, which is a target maturity index fund with a benchmark maturity date of April 30, 2025, during the new fund offer.
The new fund, which opens on January 10 and closes on January 20, tracks the Crisil IBX 70:30 CPSE plus SDL-April 2025 benchmark and the portfolio is specifically designed to invest predominantly in AAA-rated Central public sector units and rated SDL securities, the fund house said in a statement on Monday without offering a targeted AUM during the offer period.
However, a spokesperson of the fund house told PTI that the fund has an internal target of garnering Rs 500 crore during the offer period. The fund house said Devang Shah and Kaustubh Sule will be the mangers of the new fund. The open-ended target maturity index fund will invest predominantly in the constituents of Crisil IBX 70:30 CPSE Plus SDL – April 2025 with a moderate interest rate risk and a relatively low credit rate risk.
The scheme seeks to provide returns that closely correspond to the total returns of the securities as represented by the underlying index. The Crisil IBX 70:30 CPSE Plus SDL-April 2025 index contains two components as on the base date of index that are rebalanced every quarter. The AMC will invest 70 per cent of the fund in AAA-rated CPSEs and the at inception of the fund top 7 CPSE issuers shall be selected based on liquidity score of the securities maturing in the eligible period for CPSE, while the remaining 30 per cent will get invested in top 6 SDLs with a minimum outstanding of Rs 1,000 crore selected on the basis of liquidity.
The launch will facilitate passive investing for debt investors by offering them a fund that has defined tenure of close to three years, allowing them to take advantage of low duration strategies. Target maturity index funds are an ideal solution for investors with a set investment horizon. Chandresh Nigam, MD & CEO of Axis AMC, said this debt index fund aligns with “endeavour to strengthen our passive product suite over time.
By offering investors an attractive debt strategy within the passive space, we want to introduce robust products that are relevant in the current context”. The three-year debt space has seen yields rising by over 100 bps. Already ICICI Prudential AMC and Aditya Birla Sunlike MF have such debt PSU funds launched last September.
While ICICI Prudential PSU Bond plus SDL 40:60 index fund was launched in September last and it invests in the constituents of Nifty PSU Bond Plus SDL Bond Sep 2027 40:60 index, on the other hand, Aditya Birla Sun Life Nifty SDL Plus PSU Bond Sep 2026 60:40 index fund is an open-ended scheme tracking the Nifty SDL Plus PSU Bond Sep 2026 60:40 index and was launched in the same month.