Aditya Birla Sun Life Mutual Fund Introduces CRISIL 10 Year Gilt ETF
Aditya Birla Sun Life Mutual Fund has launched a new fund called the Aditya Birla Sun Life CRISIL 10 Year Gilt ETF. This is an open-ended debt exchange-traded fund (ETF) that follows the CRISIL 10 Year Gilt Index. It has a relatively high interest rate risk but a low credit risk.
The New Fund Offer (NFO) is now open for people to invest in and will close on August 12. After that, the scheme will be available for buying and selling within five business days from the allotment date.
The main goal of this scheme is to generate returns that match the total returns of the CRISIL 10 Year Gilt Index minus any expenses. However, there could be some tracking errors. Investors need to buy at least 25000 units initially. Then they can buy more in multiples of that amount. This scheme will be managed by Bhupesh Bameta, Sanjay Godambe and Vighnesh Gupta. It will be benchmarked against CRISIL 10 Year Gilt Index. The minimum amount you can invest is Rs.1000. Then you can invest more in multiples of Rs.100. The total expense ratio (TER) is capped at 1% according to regulations.
The scheme plans to invest 95-100% of its assets in government securities. It will invest 0-5% in treasury bills (t-bills), cash and cash equivalents. Being a passively managed ETF it will follow an investment strategy that closely tracks CRISIL 10 Year Gilt Index. Though there might be some tracking error, at least 95% of assets will be invested in government securities aligning with the benchmark index.
The scheme aims to match the duration of the portfolio with the duration of the underlying index. This allows a maximum deviation of +/- 10%. It may also invest in securities that have a maturity range within +/- 10% of the index’s maturity range.
This ETF is a good option for investors who want to earn income by investing in government bonds over a long period. It’s especially suitable for those looking for an open-ended debt ETF that tracks CRISIL 10 Year Gilt Index.
