SBI Mutual Fund launches Target Maturity Funds (TMFs)

SBI Mutual Fund announced the launch of three target maturity funds, further expanding its offerings in the passive segment. SBI CRISIL IBX Gilt Index – June 2036 Fund, SBI CRISIL IBX Gilt Index – April 2029 Fund, and SBI CRISIL IBX SDL Index – September 2027 Fund are open-ended target maturities index funds investing in constituents of the CRISIL IBX Gilt Index – June 2036 Index, the CRISIL IBX Gilt Index – April 2029 Index, and the CRISIL IBX SDL Index – September 2027 Index.

The investment objective of the scheme is to provide returns that closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.

Mr. D P Singh, Deputy MD & Chief Business Officer, SBI Mutual Fund said, ” TMFs can be a good fit for investors in the current rising interest rate scenario as these funds are giving investors the opportunity to invest at current market yields. Further, if the investor stays invested till the maturity of the fund, it can also help in managing the risk associated with change in interest rates cycle. These funds predominantly invest in higher rated instruments such as Government Securities, AAA rated securities and PSU Bonds. As compared to traditional investment avenues, these funds have higher liquidity as investors have the flexibility to enter and exit the scheme any time. These funds offer tax efficient returns because of indexation benefit offered by debt funds. Mr. Singh added.”

The scheme (s) would invest a minimum of 95% and a maximum of 100% of its assets in securities covered by the CRISIL IBX Gilt Index – June 2036 / CRISIL IBX Gilt Index – April 2029 / CRISIL IBX SDL Index – September 2027. It may also invest up to 5% of its assets in government securities maturing on or before the maturity date of the Scheme, money market instruments including Triparty Repo, and units of liquid mutual funds. The minimum application amount required is Rs. 5,000 and in multiples of Rs. 1 thereafter. Mr. Dinesh Ahuja is the fund manager of these schemes. Please refer the Scheme Information Document for more information on the scheme (s).

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