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Mumbai: PGIM India Mutual Fund , one of India’s fastest growing AMCs, today announced the launch of PGIM India CRISIL IBX Gilt Index - Apr 2028 Fund, a predominantly G-Sec Index Fund.

The investment objective of the scheme is to generate returns that corresponds to the total returns of the securities as represented by the CRISIL IBX Gilt Index - April 2028 (before fees and expenses), subject to tracking errors.

The weightage of the G-Sec securities and T-bills Securities in this index fund will be 98% and 2%, respectively. The fund will mature on April 05, 2028. All G-Sec securities selected will have a maturity date from September 6, 2027 to April 5, 2028. The index will be reviewed and rebalanced on a 6 monthly basis.

The PGIM India CRISIL IBX Gilt Index - Apr 2028 Fund opens today for subscription from February 2, 2023, to February 16, 2023. The fund will be managed by Puneet Pal, Head – Fixed Income, PGIM India Mutual Fund, and co-managed by Bhupesh Kalyani, Fund Manager, PGIM India Mutual Fund.

“Given the aggressive and frontloaded rate hikes, major central banks including RBI have slowed the quantum of rate hikes. With inflation cooling off globally and locally, rates may also peak out consequently. G-Sec oriented mutual fund portfolios generally provide an additional spread over traditional deposits and are tax-efficient for investors looking to lock-in at the current elevated yield levels. In this scenario, PGIM India CRISIL IBX Gilt Index - Apr 2028 Fund offers an optimal opportunity to benefit from the current interest rates. While TMFs are permitted to invest across G-Sec/SDL/Corporate Bonds, we believe G-Sec oriented portfolios offer better risk-reward opportunity. Hence, PGIM India will focus on launching predominantly G-Sec based funds rather than having a mixture of SDL/Corporate Bonds going ahead as well,” said Puneet Pal, Head – Fixed Income, PGIM India Mutual Fund.

The minimum application amount is Rs 5,000 with additional purchase of Rs 1,000 thereafter.

Why look at 100% government securities, passive, hold-till-maturity product now?

* The yield curve is flat which means market is expecting Inflation to fall going ahead

* Spreads of SDLs and AAA PSU over G-Sec are much below their median, which favours G-Sec

* Globally and locally inflation has cooled off soon and, in our view, rates and yields maybe close to peaking out

Who should invest:

* Investors with long-term investment goals, which are in line with the maturity period of the scheme

* Investors looking for high liquidity in their investment portfolio

* Investors looking for tax-efficient reasonable returns

* Investors with a low-risk appetite for credit exposures and are seeking high-quality portfolio

Other details

* Scheme Name: PGIM India CRISIL IBX Gilt Index – Apr 2028 Fund

* Scheme Category: Index Fund

* NFO Opening date: February 02, 2023

* NFO Closing Date: February 16, 2023

* NFO Allotment Date: February 22, 2023

* NFO Reopening Date: February 27, 2023

* Underlying Index: CRISIL-IBX Gilt Index - April 2028

* Exit Load: Nil

* Plans: Regular & Direct

* Options: Growth, IDCW – Payout & IDCW – Reinvestment

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