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.
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.
An equal allocation of 50% weightage in each into AAA-rated bonds of government-owned entities and 50% in SDLs(State Development Loans).
The index has a defined maturity date of 30 September 2020.
Index will follow a Buy & Hold Strategy. Hence, the selected portfolio will be held till maturity.
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:
|Securities||Minimum Indicative asset allocation(%)||Maximum Indicative asset allocation(%)||Risk Profile|
|Bonds issued by Central Public Sector Entities, Units & Financial Institutions and other government entities constituting the bond part of Nifty CPSE Bond Plus SDL Sep 2024 50:50 Index||95%||100%||Low to Moderate|
|State Development Loans (SDLs) constituting the SDL part of Nifty CPSE Bond Plus SDL Sep 2024 50:50 Index||Low to Moderate|
|Money Market Instruments (T-bills, G-secs & Tri-party Repos)||0%||5%||Low to Moderate|
- 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.
- 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.
|NFO Period||03 to 09 November 2020|
|Benchmark||Nifty CPSE Bond Plus SDL September 2024 50:50 Index|
|Price||Approximately 1/10th of the benchmark index|
|Fund Manager||Prashant Pimple|
Entry Load: Not Applicable
Exit Load: Not Applicable
|Minimum Application Amount||Rs.5,000 & in multiples of Rs.1 thereafter.|
|Minimum Application (During ongoing offer)|
On Exchange: Minimum 1 unit & in multiples of 1 thereafter.
Through Mutual Fund: Create or redeem in exchange of deposit & cash component in creation size of 2,30,000 units.
|Listing||NFO units will be listed within 5 business days from the allotment date.|