NFO Alert: Subscription opened in Aditya Birla Sunlife’s new fund offer, is this scheme right for you?

Important points about Aditya Birla Sunlife’s NFO

– NFO opening date: 30 September 2024

– NFO closing date: 7 October 2024

– Fund Type: Open-Ended Target Maturity Index Fund (Debt Fund)

– Benchmark Index: CRISIL-IBX AAA NBFC-HFC Index – Sep 2026

– Risk Level: Moderate

– No entry and exit load.

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Benefits of investing in NFO

The fund will mature by 2026 and will provide investors with stable and relatively safe returns during this period. Its main objective is to provide investors with exposure to high quality debt instruments by investing in debt instruments of AAA rated NBFC and HFC companies. This fund will invest exclusively in AAA rated corporate bonds of India’s top NBFCs and HFCs. With this, investors will benefit from the stability and growth potential present in these areas. Investing in high quality bonds of these sectors will help in keeping the risks low. Although this is a target maturity fund, investors can still withdraw their money before maturity if they wish. This gives investors flexibility as per their cash needs.

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What will be the investment strategy?

The investment strategy of this fund is Buy & Hold, which means that the bonds included in the portfolio will be held till their maturity. If a bond drops out of the index, the portfolio will be rebalanced. This work will be done twice a year in April and October.

What will be the yield to maturity?

The Yield to Maturity (YTM) of this fund is estimated to be between 8.01% to 8.05%, which makes it an attractive option for investment. Due to the strong balance sheets and better asset quality of NBFCs and HFCs, the yields on these bonds remain stable.

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You will get the benefit of price increase if yields decrease: Balasubramaniam

Aditya Birla, Managing Director and CEO, Sunlife AMC Limited, A. Commenting on the new fund launch, Balasubramaniam said, “This target maturity fund investing in India’s leading NBFCs and HFCs offers a good investment opportunity. Corporate bond yields and liquidity are well positioned over a maturity period of 2 to 3 years. are balanced, making them a perfect investment option. If yields fall in the future, investors can benefit from price appreciation in high quality bonds, with attractive yields and favorable risk-return profiles. The ‘roll-down’ strategy is expected to be particularly effective in this environment.”

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For whom is this scheme right?

This NFO (CRISIL-IBX AAA NBFC-HFC Index – Sep 2026 Fund) of Aditya Birla Sunlife can be a great option for investors who are looking for safe and stable returns. And those who want to invest for medium term i.e. two-three years. This fund will invest in AAA rated bonds, so the credit risk is relatively low. Investors who want stability and long-term gains in their portfolio can consider investing in this NFO. Apart from this, investors can also get the benefit of price increase if interest rates fall. Also, due to the ongoing credit demand in NBFC and HFC sectors and falling inflation rate, there is a possibility of better returns in this fund. But before taking any decision, understand thoroughly all the things related to the scheme and the risk-return balance.

(Disclaimer: The purpose of this article is not to give advice on investing in any fund, it is only to provide information. Take any investment decision only after taking the advice of your investment advisor.)