Aditya Birla Sun Life Mutual Fund Launches Target Maturity Fund Investing in NBFCs And HFCs

Aditya Birla Sun Life Mutual Fund announced the launch of a Target Maturity Fund, namely Aditya Birla Sun Life CRISIL-IBX AAA NBFC-HFC Index-Sep 2026 Fund, which invests in India’s top NBFCs and HFCs.

NFO Details

The New Fund Offer (NFO) will remain open from September 30, 2024, to October 7, 2024. The minimum investment is Rs 1,000 and the minimum additional investment is Rs 1,000. There is no exit load involved in the scheme.

According to the fund house, this fund has moderate interest rate risk and relatively low credit risk. Investors looking for a passive debt option with an investment horizon ranging from 3 to 24 months can consider this fund, the release said. 

Investment Philosophy

The fund will focus on a Buy-and-Hold Strategy, and its portfolio will comprise 100 per cent AAA-rated corporate bonds in the NBFC and HFC space, the fund house said.

"Securities with this rating (AAA rating) are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such securities carry the lowest credit risk," says CRISIL ratings.

Rebalancing will occur semi-annually in April and October until the index maturity on September 30, 2026, unless bonds become ineligible. This strategy offers a structured approach to long-term investment in the robust NBFC and HFC sectors.

A. Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC Ltd, said, “Corporate bond yields and liquidity are notably well-balanced at the 2 and 3-year maturities, offering a timely investment opportunity. If yields decline from now on, investors could benefit from potential price appreciation, particularly in high-quality papers. With attractive yields and a favorable risk-reward profile, a roll-down strategy is particularly well-suited to the current interest rate environment.”