Invesco Mutual Fund on Thursday announced the launch of two target maturity debt index funds to capitalise on the rising interest rates for secured returns.
Invesco India Nifty G-Sec Jul 2027 Index Fund and Invesco India Nifty G-sec September 2032 Index Fund are open-ended target maturity index funds tracking the respective Nifty G-Sec indexes for July 2027 and September 2032.
The funds have relatively high interest rate risk with relatively low credit risk.
They will invest 95-100 per cent of its net assets in government securities (G-Sec), mirroring the underlying benchmark indexes as per the pre-determined date.
The new fund offers (NFOs) for both funds have opened today; however, the former will close on March 17, and the later on March 24, 2023.
Detailing the funds, Taher Badshah, chief investment officer of Invesco Mutual Fund, said, “With central banks steering towards the end of rate hike cycle, Indian fixed-income market has come to an inflection point with risk-reward turning favourable for investors. The sharp increase in interest rates over the past one year now warrants for increased allocation towards fixed-income as an asset class.”
He added these asset classes have the potential to generate “meaningful income”. Badshah said, “The funds have been carefully designed to capitalise on the prevailing high interest rates in the market and are particularly suited to investors with a specific financial goal that aligns with the fund’s maturity timeline.”
Vikas Garg, head of fixed income, Invesco Mutual Fund, said: “The market is offering attractive carry opportunities, as interest rates are approaching their peak and future rate actions expected to be more calibrated and data dependent.
“Global factors could influence domestic policy actions, which could lead to some market volatility in the short term,” Garg said, adding, investors can reap the benefit of attractive carrying opportunities and achieving their financial goals by staying invested for the entire tenure without getting impacted by rate volatility.
Krishna Cheemalapati and Vikas Garg are dedicated fund managers of the schemes.
Key Features
The NFOs for Invesco India Nifty G-Sec July 2027 Index Fund and Invesco India Nifty G-sec Sep 2023 Index Fund opened on March 16, 2023.
The former will close on March 17 and the latter on March 24, 2023.
The funds’ minimum initial investment is Rs 1,000, and after that, in multiples of Re 1.
They will invest 95-100 per cent of its net assets in government securities (G-Sec).
Both funds will track the respective underlying benchmark indexes according to their pre-determined date.
