Axis Mutual Fund, one among the fastest growing fund houses in India, announced the launch of their new fund offer - Axis Nifty SDL September 2026 Debt Index Fund. It is an open-ended target maturity index fund investing in constituents of Nifty SDL Sep 2026 Index; a relatively high interest rate risk and relatively low credit risk. The new fund will track the Nifty SDL Sep 2026 Index. The investment objective of the scheme is to provide investment returns corresponding to the total returns of the securities as represented by the Nifty SDL Sep 2026 Index before expenses, subject to tracking errors. However, there can be no assurance that the investment objective of the Scheme will be achieved. With Aditya Pagaria helming the fund, the minimum investment amount would be Rs. 5,000 and in multiples of Rs. 1/- thereafter.
Target maturity funds allow investors to access specific maturity buckets. The transparent nature of such a strategy provides investors a clear picture of the portfolio and the instrument mix. As a passive fund, the product aims to replicate a designated index created by reputed index providers. The 'held to maturity' nature of target maturity strategies aims to minimize duration risk for investors who remain invested through the life of the fund.
The open ended nature of such a fund means that investors can use systematic investment and withdrawal facilities to tailor entry and exit in the fund to meet investor objectives. Further, these funds do not have lock-ins and hence provide liquidity to investors, should they wish to redeem mid-term without any hassles.
Why Consider Investing in SDLs (State Development Loans)
SDLs are state government securities issued to meet budgetary expenses and implement development projects. SDLs are one of the most liquid instruments traded in the Indian debt market. They typically trade at a premium to comparable government securities. The RBI has raised policy rates by ~190 bps between April '22 to September '22 to combat rising inflation. This has resulted in a sharp retracement across the short end of the curve (1-3 Year segment) even as the long end of the curve remains anchored. Today, the flat yield curve offers opportunities for investors in the 3 to 5-year segment from a risk reward standpoint. Hence, the Axis Nifty SDL September 2026 Debt Index Fund offers an ideal investment opportunity for investors looking to lock in rates over the 3.5-year investment opportunity.
Axis Nifty SDL September 2026 Debt Index Fund
The Axis Nifty SDL September 2026 Debt Index Fund aims to follow a low friction investment strategy by tracking a pre-specified benchmark/index as closely as possible. It is ideal for investors looking to create a high quality passive debt portfolio with a relatively longer investment horizon. Managed by NSE Indices Limited, currently, the Nifty SDL Index Sep 2026 is a portfolio of State Development Loans (SDLs) maturing between April 01, 2026 to September 30, 2026. Rebalanced semi-annually, the index comprises of a highly liquid portfolio of SDLs issued by 15 states based on the following parameters:
- Minimum issue size of Rs. 500 CR
- Emphasis on liquidity - Index will be evaluated basis volume and frequency of trading in underlying securities
- Weighted basis liquidity and size of issuance to ensure portfolio liquidity
Top features of the fund include:
- Low Cost Passive Investment: A hassle free solution for investors looking for a low cost fixed income product
- No Bias in Security Selection: As the fund is passively managed and invests in the constituents of Nifty SDL - Sep 2026 Index, there is no bias in security selection
- Simple and Easy: Target maturity and high quality SDL portfolio with the benefit of indexation
Commenting on the launch of the NFO, Chandresh Nigam, MD & CEO, Axis AMC said, "We believe that the Axis Nifty SDL September 2026 Debt Index Fund will be a notable add-on to our offerings in the passive debt side. Investors can leverage the benefit of a consistent style (as index represents a defined set SDLs issued by state governments) and a relatively lower risk exposure (as the index fund offers a well-defined mix sovereign exposure by way of SDLs) in addition to lower expenses and market linked returns. As a fund house that believes in 'responsible investing', we are offering investors the opportunity to invest in quality assets."
The new fund offers (NFO) opens for subscription from November 04, 2022 to November 16, 2022.