Edelweiss launches the maiden short-term index fund. Should you invest?

Edelweiss’ new short-term index fund

Edelweiss introduces a new short-term index fund

New Fund Offers (NFOs) allow mutual fund companies to launch new fund schemes and allow investors to invest in such funds at fixed NAVs (Net Asset Value). Recently, Edelweiss AMC (Asset Management Company) launched its NFO, introducing the first-ever short-term index fund in the market. Called the Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund, the NFO started on 27th January 2023. Let’s understand what the scheme is all about.

About Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund

The new fund is India’s first index fund with a short-term investment objective. Here are some of the salient features of the fund –

  • The NFO will close on 10th February 2023.
  • The portfolio would consist of government securities (Indian Government Bonds) and SDLs (State Development Loans) in a 50:50 ratio.
  • Government securities with the highest liquidity with maturities ranging between 1 and 5 years will be selected. Moreover, the selected bonds will have a minimum outstanding balance of Rs.10,000 crores.
  • SDLs will be selected using a two-fold segregation method. First, the most liquid SDLs that match the selected duration buckets will be selected. Then, the most liquid security from each bucket will be selected, with a minimum outstanding of Rs.500 crores.
  • The scheme’s benchmark is CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index. This index comprises of SDLs issued by the governments of Gujarat, Rajasthan and Karnataka.
  • The fund managers are Rahul Dedhia and Dhawal Dalal.
  • The important metrics of the fund are as follows –
 important metrics of the fund

Related - Find out what index funds are and do they make sense.

Should you invest in the scheme?

Here are some factors that work in favour of the fund –

  • It is a low-cost fund where the expense ratio is very low.
  • There is minimal volatility and credit risk as the fund invests in government securities.
  • The fund offers a short-term investment avenue for your short-term goals.

So, if you want to invest in debt funds with a short-term outlook, the Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund can be a good choice. Being a passive fund, the scheme will mirror the benchmark returns and help you earn stable returns.

Related - Passive or active, which mutual fund should you choose? Read to find out.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.

New Fund Offers (NFOs) allow mutual fund companies to launch new fund schemes and allow investors to invest in such funds at fixed NAVs (Net Asset Value). Recently, Edelweiss AMC (Asset Management Company) launched its NFO, introducing the first-ever short-term index fund in the market. Called the Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund, the NFO started on 27th January 2023. Let’s understand what the scheme is all about.

About Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund

The new fund is India’s first index fund with a short-term investment objective. Here are some of the salient features of the fund –

  • The NFO will close on 10th February 2023.
  • The portfolio would consist of government securities (Indian Government Bonds) and SDLs (State Development Loans) in a 50:50 ratio.
  • Government securities with the highest liquidity with maturities ranging between 1 and 5 years will be selected. Moreover, the selected bonds will have a minimum outstanding balance of Rs.10,000 crores.
  • SDLs will be selected using a two-fold segregation method. First, the most liquid SDLs that match the selected duration buckets will be selected. Then, the most liquid security from each bucket will be selected, with a minimum outstanding of Rs.500 crores.
  • The scheme’s benchmark is CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index. This index comprises of SDLs issued by the governments of Gujarat, Rajasthan and Karnataka.
  • The fund managers are Rahul Dedhia and Dhawal Dalal.
  • The important metrics of the fund are as follows –
 important metrics of the fund

Related - Find out what index funds are and do they make sense.

Should you invest in the scheme?

Here are some factors that work in favour of the fund –

  • It is a low-cost fund where the expense ratio is very low.
  • There is minimal volatility and credit risk as the fund invests in government securities.
  • The fund offers a short-term investment avenue for your short-term goals.

So, if you want to invest in debt funds with a short-term outlook, the Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund can be a good choice. Being a passive fund, the scheme will mirror the benchmark returns and help you earn stable returns.

Related - Passive or active, which mutual fund should you choose? Read to find out.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.

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