Bandhan Mutual Fund introduces Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund
Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund is a target maturity index fund offering sovereign-backed stability and optimised returns.
Bandhan Mutual Fund has launched the Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund, an open-ended target maturity index fund designed to offer investors a structured and sovereign-backed investment opportunity. This fund provides exposure to a blend of 90 per cent State Development Loans (SDLs) and 10 per cent Government Securities (G-Secs), making it an attractive option for investors seeking stability and predictable returns.
With a defined maturity of December 2029, the fund aligns with the evolving interest rate environment, allowing investors to plan their investments with greater clarity on tenure and return potential.
The New Fund Offer (NFO) opens on February 25, 2025, and closes on March 5, 2025. Investors can subscribe through licensed mutual fund distributors, investment advisors, online platforms, or directly on the company website.
Fund Details
- Fund Name: Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund
- Fund Type: Open-ended target maturity index fund
- Asset Allocation:
- 90 per cent in State Development Loans (SDLs)
- 10 per cent in Government Securities (G-Secs)
- Maturity Date: December 2029
- Investment Objective: To provide investors with sovereign-backed security, predictable returns, and optimized duration management
- NFO Period: February 25, 2025 – March 5, 2025
Management Comments
Commenting on the launch, Vishal Kapoor, CEO of Bandhan AMC, stated: “The fixed-income landscape is evolving, making it essential for investors to choose the right instruments to navigate shifting market conditions. Investing in a fund with a defined maturity date allows investors access to high-quality instruments that provide easy liquidity with reasonable visibility of returns if held till maturity. Additionally, SDLs maturing in 4-5 years are expected to be in high demand as we enter a rate-cut cycle. The issuance pattern of SDLs does not suggest a significant increase in supply in this segment. Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund is designed to help investors capitalize on these dynamics by offering a sovereign-backed portfolio with optimized duration and reasonable accruals.”
Market Outlook and Investment Rationale
The fixed-income market is at a crucial juncture, with multiple factors shaping SDLs as a preferred choice for fixed-income investors:
- Favourable Interest Rate Cycle: As India moves toward a rate-cut environment, SDLs offer better positioning and higher demand, making them attractive investments.
- Structural Demand for SDLs:
- The sovereign yield curve remains stable, ensuring SDLs remain well-placed in the market.
- Government focus on long-term G-Sec issuances and buybacks is reducing the supply of shorter-term G-Secs, making SDLs a preferred alternative.
- The RBI’s draft LCR (Liquidity Coverage Ratio) framework is expected to increase banks’ demand for high-quality liquid assets, strengthening SDL demand.
- Slowing credit growth and rising core liquidity push banks to expand their investment books, further supporting SDL allocations.
- Attractive Risk-Return Profile: Compared to the corporate bond segment, SDLs provide better stability and efficient duration exposure, ensuring a balanced fixed-income investment opportunity.
Conclusion
With sovereign-backed securities, a defined maturity, and an optimized portfolio composition, the Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund presents a compelling option for investors seeking predictability and stability in their fixed-income investments. By aligning with shifting market conditions and the evolving interest rate cycle, this fund offers an efficient and structured approach to long-term wealth preservation.
Disclaimer: The article is for informational purposes only and not investment advice.