Nippon India ETF Nifty CPSE Bond Plus SDL- 2024 Maturity NFO

Nippon India ETF has announced the launch of Nippon India ETF Nifty CPSE Bond Plus SDL- 2024 Maturity. The NFO(New Fund Offer) for this fund opens on 03 November 2020 & closes on 09 November 2020.

What is an ETF?

An Exchange Traded Fund (ETF) is a basket of securities that tracks a particular index. It is listed & traded on the stock exchange. It can invest in securities like equity, commodities, money market instruments & other debt securities. 

About Index

Type of Securities

• Index aims to track the performance of the portfolio consisting
• AAA-rated bonds issued by government-owned units or companies
• SDLs (State Development Loans)
• The underlying securities have maturities between 01 October 2023 to 30 September 2024.

Category Weightage

An equal allocation of 50% weightage in each into AAA-rated bonds of government-owned entities and 50% in SDLs(State Development Loans).

Maturity

The index has a defined maturity date of 30 September 2020.

Strategy

Index will follow a Buy & Hold Strategy. Hence, the selected portfolio will be held till maturity.

Return Calculations

Total Returns will be used for return calculations which will include price returns & coupon payouts.

Nippon India ETF Nifty CPSE Bond Plus SDL 2024 Maturity - Scheme details

• Investment Objective

To provide returns to investors that closely correspond to the total returns generated by securities constituting the Nifty CPSE Bond Plus SDL Sep 2024 50:50 Index before expenses, subject to any tracking errors. 

• Asset Allocation

The indicative asset allocation is as follows:

• Type of Scheme

It is an open-ended targeted maturity CPSE Bond Plus SDL Fund trading on exchange which primarily invests in the constituent securities Nifty CPSE Bond Plus SDL Sep 2024 50:50 Index.

Why invest in Nippon India ETF Nifty CPSE Bond Plus SDL- 2024 Maturity?

• Relatively Safe: Investments will be made in AAA-rated papers of government-owned entities & State development loans which are quasi-government securities. Hence, the ETF is highly safe.
• Tax-Efficient Gains: Long-Term Capital Gains on this fund will be taxed at the rate of 20% after indexation benefits.
• Transparent: Due to the ETF structure, daily disclosure of the portfolio deposit is made via the creation unit.
• No lock-in period: Units can be bought or sold on exchange & through the mutual fund at the prevailing market rates.
• Low Costs: The fund will have a low Total Expense Ratio(TER).
• Lower Risks: Security selection risks are lower due to following the Buy & Hold strategy and the index.

Investment Philosophy

• The scheme would primarily invest in AAA-rated bonds of government entities & State development loans (SDL) constituting the Nifty CPSE Bond Plus SDL- 2024 50:50 Index.
• The securities comprising the portfolio are expected to have similar key characteristics as of the benchmark in terms of maturity & type of securities.
• The scheme will follow a buy & hold strategy where underlying investments i.e bonds & SDLs will be held till their maturities.
• A roll-down strategy will be followed in the portfolio, hence incremental investments will be made in bonds & SDLs comprising the index.
• In case the underlying securities i.e bonds & SDLs mature during the tenure, the proceeds shall be deployed in T-bills & Tri-party Repos till the maturity.
• The scheme will have the same maturity as of the underlying benchmark index.

Fund Details