Recently IDFC MF introduced two new government securities index schemes. These are:IDFC Gilt 2027 Index Fund and the IDFC Gilt 2028 Index Fund. Both are the part of CRISIL Gilt 2027 Index and Gilt 2028 Index respectively.
The schemes will mature on 2027 and 2028 on June 30 and April 5 respectively.
These IDFC’s gilt funds make the investment in instruments backed by the government of India. Hence, assure the prevention of credit risk and durability risk.
The liquidity of the gilts is higher and thereby minimizing the cost incurred executing the transaction.
Rates for the medium-term are higher as of now. However, the interest rates are low at present. The yield for the given maturity period may be less. Additionally, the credit risk associated with them is also less.
Both the funds focus on providing top debt investment to the investors along with appropriate returns.
It is advisable for the investor to invest their money in the bonds to hold the investment till maturity. As a result, the investment till maturity will give a high return in investment as the reward.
Approximately, holding these investments till maturity will give 5.5 – 5.6 percent post-tax returns.
These funds may have sudden variation with the increase in the interest rate due to inflation in the short –term.
These schemes invest in government securities. Therefore the credit risk is negligible.
Investment in any of the two schemes will be beneficial for the investors looking for a less risky investment alternative.
The last date for the offer is March 19, 2021.
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