Bandhan Mutual Fund Launches Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund
MFNews
The fund is designed to provide exposure to a portfolio comprising 90% State Development Loans (SDLs) and 10% Government Securities (G-Secs)
Chandigarh: Bandhan Mutual Fund has announced the launch of the Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund, an open-ended target maturity index fund that offers investors a structured and sovereign-backed investment opportunity. The fund is designed to provide exposure to a portfolio comprising 90% State Development Loans (SDLs) and 10% Government Securities (G-Secs). With a defined maturity in December 2029, the fund allows investors to participate in the evolving interest rate cycle with clarity on investment tenure and return potential. The New Fund Offer (NFO) opens on February 25, 2025, and closes on March 05, 2025. Investors can subscribe to the fund through licensed mutual fund distributors, investment advisors, online platforms, and directly at https://www.bandhanmutual.com
Commenting on the launch, Vishal Kapoor, CEO, Bandhan AMC, said, “The fixed-income landscape is evolving, making it essential for investors to choose the right instruments to navigate shifting market conditions. Investing in a fund with a defined maturity date allows investors access to high-quality instruments that provide easy liquidity with a reasonable visibility of returns if held till maturity of schemes. Additionally, right now, SDLs maturing in 4-5 years are expected to be in high demand as we enter the rate cut cycle and the issuance pattern of SDLs does not suggest a significant increase in supply in this segment. Bandhan CRISIL-IBX 10:90 Gilt + SDL Index – Dec 2029 Fund is designed to help investors capitalise on these dynamics by offering a sovereign-backed portfolio with optimised duration and reasonable accruals.”
While the longer end of the corporate bond curve offers duration exposure, it may not be as attractive compared to the sovereign curve. In contrast, the absence of an inversion in the sovereign curve ensures that SDLs are structurally well-positioned for the rate-cut cycle, offering a more balanced and efficient investment opportunity. Also, multiple structural factors are driving demand for SDLs. The government’s focus on long-term G-Sec issuances and buybacks is reducing the supply of shorter-end G-Secs, potentially lowering yields and increasing demand for other sovereign assets like SDLs. The RBI’s draft LCR framework is set to increase liquidity coverage requirements, prompting banks to strengthen their holdings of high-quality liquid assets. Slowing credit growth is encouraging banks to expand their investment books, while rising core liquidity may further support demand for sovereign securities.
