SBI Mutual Fund on Monday initiated a CPSE Bond Plus SDL index fund, an open-ended targeted maturity index fund investing in the constituents of the Nifty CPSE Bond Plus SDL Sep 2026 index.
The new fund, which tracks the state development loans (SDL) September 2026 50:50, opened on Monday and closes on January 17, the AMC said in a statement without sharing how much it seeks to collect during the NFO phase.
The scheme seeks to offer returns that closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.
The new fund is suitable for investors who are seeking income over the target maturity period and safer fixed income avenues.
With the addition of the CPSE Bond Plus SDL Sep 2026 index fund, SBI AMC continues to augment its portfolio in the fixed income passive investment space, in addition to its actively managed funds.
This fund provides indexation benefit to investors, with long-term capital gains in debt mutual funds taxed at 20 per cent after indexation, compared with 30 per cent without indexation (assuming highest income slab rate) in traditional investment options, the AMC said.
The fund provides an opportunity to gain exposure in CPSE bonds and SDL, with the added benefit of liquidity. Its pre-defined maturity of September 30, 2026, enables the investor to invest in securities maturing around the maturity date of the scheme, thus minimising reinvestment risks.
The duration of the underlying portfolio reduces as the scheme nears maturity, given that the scheme follows a defined maturity investment — September 2026.
The scheme will invest 95-100 per cent in securities covered by Nifty CPSE Bond Plus SDL September 2026 50:50 index.
The remaining five per cent in G-secs maturing on or before September 2026, money market instruments including triparty repo and units of liquid mutual funds, it said.