- Conservative, risk-averse investors or those funding critical goals typically prefer traditional fixed income instruments for predictable returns.
- Traditional fixed income instruments often offer low returns, especially after considering TDS and inflation, with added costs for early liquidation.
- An interesting investing opportunity lies within G-secs today. Being backed by the government of India they are practically risk-free. The current elevated interest rate environment means they are available at elevated yields today. Further their inclusion in global indices, is likely to drive their demand up giving you an additional potential for earning capital gains. All-in all, a debt investment offering better returns at low risk levels.
- Target maturity funds are an effective way to invest in G-secs. These funds follow a passive, index-based strategy, replicating the portfolio of an underlying index with a known maturity date.
- This approach provides predictable returns within a predefined timeframe, practically eliminates duration risk (if held to maturity) and offers liquidity through their open-ended nature.
- Aditya Birla Sun Life CRISIL IBX Gilt June 2027 Index Fund is a target maturity fund that invests in a portfolio of G-secs comprised in the underlying index.
- This fund is a good means to capitalise on current high interest rates and lock them in for the duration of the fund.
- The fund is suited for a medium term, up to the maturity date of June 30, 2027.