HSBC Mutual Fund on March 6, 2023 announced the launch of HSBC CRISIL-IBX Gilt Index – June 2027 Index Fund. This is an open-ended target maturity index fund that will track the Crisil-IBX Gilt Index-June 2027, HSBC Mutual Fund announced in a press release.
The new fund offer (NFO) will close on March 20, 2023 and the fund will reopen on March 27, 2023.
HSBC Mutual Fund said the passively-managed debt fund scheme scheme will offer relatively high interest rate risk and relatively low credit risk. Its investment objective is to provide returns corresponding to the total returns of the securities as represented by the CRISIL-IBX Gilt Index - June 2027.
The fund will predominantly invest in government securities (G-secs) and treasury bills in order to replicate the CRISIL-IBX Gilt Index - June 2027, and up to 5 per cent in money market instruments, including commercial papers and commercial bills.
According to HSBC Mutual Fund, the scheme will offer several benefits to investors.
The fund will invest in quality sovereign debt papers backed by relatively low risk, liquidity, and tax benefit, with an aim to offer better risk-adjusted performance. It will follow a buy-hold investment strategy that will offer relatively better yielding investments along with indexation benefit and no load. The roll-down maturity feature can help achieve targeted returns over the defined period, and lastly, there is reduced interest rate risk, as duration risk keeps reducing with defined maturity date and negates duration risk as one remain invested through the life of the fund, HSBC Mutual Fund announced in a press statement.
Kailash Kulkarni, co-CEO, HSBC Asset Management (India) Private India, said, “With the launch of HSBC CRISIL-IBX Gilt Index – June 2027 Index Fund, investors have an opportunity to benefit from planned target goal in volatile times. Target maturity index funds aim for better risk-adjusted return, provides liquidity, diversification, and defined maturity and tax efficiency. In the current market, the fund offers good entry point for long-term investors in terms of risk-reward.”
Shriram Ramanathan, chief investment officer – fixed income, HSBC Asset Management (India) Private Limited, said: “The fund aims to track the index performance, while offering liquidity. It offers relatively attractive yielding investment options through investments in gilt, and presents liquidity feature with open-ended nature. The fund has relatively low credit risk due to investment as per index, and majorly in sovereign G-sec papers. The 4-5 year point in the yield curve makes it attractive.”
