Axis Mutual Fund, one of the fastest growing fund houses in India, announced the launch of their new fund offer - 'Axis CRISIL SDL 2027 Debt Index Fund'. It is a target maturity Index Fund whose benchmark maturity is May 31, 2027. The new fund will track the CRISIL IBX SDL Index - May 2027 and the portfolio is designed to invest predominantly in a portfolio of State Development Loans (SDLs) maturing between December 01, 2026 to May 31, 2027. The index will be managed by CRISIL Indices Limited.
Understanding SDLs (State Development Loans) & Target Maturity Funds
SDLs are state government debt issued to meet budgetary expenses and implement development projects. SDLs are one of the most liquid instruments that trade above the G-Sec curve and can be held for the long term. This trading is managed by the RBI.
Target maturity funds have started gaining importance since they allow investors to take advantage of duration strategies, due to their defined tenures. The fund manager achieves this by buying securities with similar maturities as close to the defined maturity date and holds them to maturity. The strategy aims to negate any duration risk for investors who remain invested through the life of the fund.
Axis CRISIL SDL 2027 Debt Index Fund
Axis CRISIL SDL 2027 Debt Index Fund's target maturity structure helps in better allocation, building a high quality passive portfolio and efficient taxation. It is ideal for investors who are looking for a relatively longer investment horizon, providing exposure to a diversified portfolio in line with the index's maturity period. The scheme seeks to provide market-linked returns as represented by the underlying index. The CRISIL IBX SDL Index will be rebalanced every quarter and comprises of SDLs issued by 12 states based on the following parameters: