SBI Mutual Fund Unveils Nifty 1D Rate Liquid ETF for Short-Term Investments
SBI Mutual Fund has introduced the SBI Nifty 1D Rate Liquid ETF – Growth, an open-ended scheme tracking the Nifty 1D Rate Index. The New Fund Offer (NFO) runs from August 4 to August 7, with units priced at ₹1,000.00. The ETF aims for high liquidity and low risk, investing 95-100% in overnight instruments and up to 5% in cash equivalents. Jignesh Shah will manage the fund, which targets short-term fund parking needs in the Indian market.
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SBI Mutual Fund, one of India's leading asset management companies, has announced the launch of its latest offering, the SBI Nifty 1D Rate Liquid ETF – Growth. This new open-ended scheme is designed to track the Nifty 1D Rate Index, providing investors with a high-liquidity, low-risk option for short-term fund parking.
New Fund Offer Details
The New Fund Offer (NFO) for the SBI Nifty 1D Rate Liquid ETF opened on August 4 and is set to close on August 7. Investors can participate in the NFO with units priced at ₹1,000.00 each.
Investment Strategy
The ETF aims to achieve high liquidity and minimal credit risk by adopting the following investment approach:
- 95-100% of the fund will be invested in Tri-Party REPOs, government securities repos, reverse repos, and overnight instruments
- Up to 5% may be allocated to cash equivalents
This strategy allows the fund to track an index that reflects overnight market returns, using government securities as collateral.
Fund Management
Jignesh Shah, who joined SBI Mutual Fund in June, will be at the helm of this new fund. Shah will manage the SBI Nifty 1D Rate Liquid ETF alongside other fixed income ETFs in the company's portfolio.
Risk Factors
While the fund aims for high liquidity and low risk, SBI Mutual Fund has noted that returns are subject to tracking error. The fund house has also emphasized that there is no guarantee of achieving the stated objectives.
Market Positioning
The launch of the SBI Nifty 1D Rate Liquid ETF – Growth comes as a response to the growing demand for short-term, liquid investment options in the Indian market. By tracking the Nifty 1D Rate Index, the fund offers investors exposure to overnight market returns backed by the security of government instruments.
This new offering from SBI Mutual Fund provides an additional tool for investors looking to park funds for short durations while potentially earning returns that reflect the overnight rates in the market. As always, investors are advised to consider their financial goals and risk appetite before investing in any mutual fund scheme.
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