NFO Alert | Baroda BNP Paribas NIFTY SDL December 2026 Index Fund

Jan 17, 2023, 17:17 IST

An open-ended Target Maturity Index Fund tracking the Nifty SDL December 2026 Index

Invest in the Trio of Fixed Maturity, Easy Liquidity & High Quality

The fund is passively managed debt index fund, employing an investment strategy that seeks to offer returns that are in line with the underlying index.

Nifty SDL Dec 2026 Index constituents are State Development Loans (SDLs) maturing around December 31, 2026.

Target Maturity Funds have potential to offer better post tax returns in comparison with traditional investments.

NFO opens January 16, 2023, and closes on January 23, 2023

Minimum application amount Rs. 5,000 and in multiples of Re 1 thereafter

Mumbai: Baroda BNP Paribas Mutual Fund launches Baroda BNP Paribas NIFTY SDL December 2026 Index Fund, An open-ended Target Maturity Index Fund replicating / tracking the NIFTY SDL December 2026 Index. The fund will be managed by Mr. Mayank Prakash (Rich experience of 14+ years) and will be benchmarked against the NIFTY SDL December 2026 Index. The fund has no entry or exit load. NFO opens January 16, 2023 and closes on January 23, 2023.

The fund will invest in a trio of fixed maturity, easy liquidity, and high-quality funds. It is suitable for investors who are looking to generate income, their investment horizon matches with the maturity date of the fund and have a moderate risk appetite.

‘’Following rapid hike in policy rates over last year, fixed income funds now offer attractive opportunity for investors. After peaking at 7.8% in April-22, CPI inflation has fallen to lowest level in last 12 months at 5.7% in Dec. This reduces pressure for further hike in interest rates. We particularly like 3–5-year SDLs, where yields have risen by nearly 175-200 bps over last year and the yield curve is virtually flat beyond this maturity said Suresh Soni, CEO, Baroda BNP Paribas Mutual Fund.

“In addition to attractive coupon accrual, investors can potentially gain from bond price appreciation as well”, added Suresh Soni.

The scheme will have two Plans: Regular and Direct. Each Plan offers Growth Option and Income Distribution cum Capital Withdrawal (IDCW) Option. The IDCW option offers payout of Income Distribution cum Capital withdrawal option. Amounts under IDCW option can be distributed out of investors capital (equalization reserve), which is part of sale price that represents realized gains. However, investors are requested to note that the amount of distribution under IDCW Option is not guaranteed and subject to availability of distributable surplus.

The maturity of the scheme will be December 31, 2026.