What are SDLs & AAA rated PSUs and Why invest in them?

State development loans (SDLs) are debt securities issued by state governments. These are listed and traded on electronic platforms. These securities are issued by state governments to raise funds for their budgetary expenses.

PSU bonds are corporate bonds, issued by Public Sector Undertakings. These are enterprises in which the government (Central, state or a combination of both) have minimum 51% ownership. The issuers that have been accorded highest credit rating by CRISIL are accorded AAA status.

Why invest in them?

• • Low credit risk
  SDLs have sovereign rating, akin to G-Secs. Thus, they give investors security for their principal and interest. AAA rated PSU bonds too are of the highest quality, thus they have low credit risk




• • High liquidity
  SDLs and AAA PSU bonds both trade on exchanges and thus enjoy high liquidity.

Why should you invest in Aditya Birla Sun Life CRISIL SDL Plus AAA PSU Apr 2025 60:40 Index Fund?

• • Clarity on Quantum of Returns
  The fund invests in SDLs and PSU bonds that have known, in-built interest rates. Thus, returns that accrue from investments in the fund are known.




• • Suitable for Financial Goal Planning
  The fund has a defined and fixed maturity date – 30th April 2025. Investors can plan their finances so as to match with the maturity date of this fund.




• • Lower risk
  SDLs have sovereign rating; the AAA PSU bonds too are of high quality. The fund therefore offers fair security of principal and interest to its investors. When held till maturity, investments in the fund also have zero duration risk.




• • High Liquidity
  The fund is open-ended with no lock in period. Further there is no entry load nor any exit load (beyond initial 30 days). Thus, investment in this fund is liquid throughout its tenure.




• • Tax efficient returns
  With a tenure of 3 years, redemption gains from this fund get the benefit of cost indexation. This lowers the capital gains liability, reducing tax liability for investors.




• • Low costs and low minimums
  Being a passive fund, it has a lower expense ratio. Furthermore, investors can invest in this fund with investments as low as Rs.500.

Product Labelling

For more information on the scheme, please refer to SID/KIM of the scheme.