Axis Mutual Fund on Friday launched the Axis Nifty SDL September 2026 Debt Index Fund, an open-ended target maturity fund with a relatively high interest-rate risk and low credit risk.
The fund house said it will invest in the constituents of the Nifty SDL (State Development Loans) Sep 2026 Index, which it will track.
The scheme’s objective, it said, is to provide yields corresponding to the total returns of the securities represented by the Nifty SDL Sep 2026 Index before expenses.
The new fund offer (NFO ) will remain open for subscription from November 4 to 16, 2022. The minimum investment amount is Rs 5,000, and after that, in multiples of Rs 1.
The target maturity funds are passive funds that allow investors to access specific maturity buckets to replicate a designated index created by reputable index providers. The funds aim to reduce the risk for investors who remain invested till maturity.
Commenting on the scheme in a press release, Chandresh Nigam, managing director (MD) & chief executive officer (CEO) of Axis AMC, said, “Investors can leverage the benefit of relatively lower risk exposure in addition to lower expenses and market-linked returns.”
Besides, based on the objectives, investors could choose systematic investment and withdrawal facilities to plan their entry and exit from the fund due to the scheme’s open-ended nature.
It also allows investors to redeem their investments mid-term hassle-free as there is no lock-in.
Why Invest in SDLs
SDLs, considered the most liquid instruments in the Indian debt market, are issued by the state governments to meet their budgetary and developmental project expenses.
They typically trade at a premium to comparable government securities.
According to the fund house, the Reserve Bank of India’s (RBI) interest rate hikes of 190 bps (basis points) from April 2022-September 2022 to fight inflation caused a “sharp retracement” across the short-end curve (1-3 Year segment) even as the long-end curve remained anchored.
It added the current flat-yield curve offers investors opportunities in the 3-5-year segment from a “risk-reward standpoint.” Hence, it said, it could be ideal for investors looking to create a high-quality passive debt portfolio with a 3.5-year investment horizon.
About The Fund
The fund house said the Axis Nifty SDL September 2026 Debt Index Fund would follow a “low-friction investment strategy” by closely tracking a pre-specified benchmark.
The Nifty SDL Index Sep 2026 is a portfolio of state development loans (SDLs) maturing between April 1, 2026, and September 30, 2026.
The index is rebalanced semi-annually and comprises a highly liquid portfolio of SDLs issued by 15 states based on parameters like a minimum issue size of Rs 500 crore, liquidity, etc.
