What is the Investment Strategy?

The Scheme seeks to generate returns corresponding to the total returns of the securities as represented by the CRISIL IBX Gilt Index – June 2027 before expenses, subject to tracking errors. 

Basic Details 

What is the Benchmark Index of ABSL CRISIL IBX Gilt June 2027 Index?

CRISIL-IBX Gilt Index – June 2027 Index seeks to measure the performance of portfolio predominantly invested in G-Sec maturing between 01 January 2027 to 30 June 2027. The index shall mature on 30 June 2027.

Features: 
1) Total Return Index seeking to capture price and coupon returns of the underlying portfolio.
2) It’s a target date index which follows a roll-down approach.
3) The index uses a buy and hold strategy wherein the portfolio of G sec is held till maturity unless they become ineligible
4) Small portion of portfolio (2%) is invested in on-the-run 91 Day T-\ bill for liquidity
5) Index portfolio marked-to-market on a daily basis using CRISIL Gilt and T-Bills valuations
6) Inception Date of Index: 28 February 2021.

Key Characteristics:
• Replicability: The index constituents are valued on a daily basis. This lends the index a realistic approach by having the valuations close to the market levels

Methodology:

1) Weights of the G-sec securities and T-bills Securities in the Index will be 98% and 2% respectively. 

2) Securities Selection methodology in G-Sec are as follows:
1. All securities selected will have a maturity date in the eligible period of G-sec which is from 1st January 2027 to 30th June 2027.
2. All Securities are selected on the basis of Amount Outstanding.
3. Minimum Amount Outstanding should be Rs. 25000 crores.
4. Surrogate bonds (namely Food Corporation of India bonds, Oil bonds, Fertilizer bonds and UTI Special Bonds), STRIPS and Floating rate bonds shall be kept out of the purview of the selection process.
5. Weights to individual securities will be calculated in the ratio of amount outstanding (30% weightage) and liquidity score (70% weightage).
6. Eligible securities will be added on a 6 monthly basis and weights will be redistributed based on ratio of amount outstanding (30% weightage) and liquidity score (70% weightage). 

3) Securities Selection methodology in T-Bills are as follows:
1. Three 91-Day T-Bill will be selected by rebalancing on a bi monthly basis.
2. This will consist of last three on-the-run 91-Day T-Bills as on the bi-monthly (once in two months) rebalancing date.
3. The maturity date of such T-bill selected should not be greater than the maturity of the fund.
4. In case no such 91 Day on-the-run T-Bill is available closer to the maturity date of the fund, T-Bill that is closest to the maturity date but maturing before the maturity date of index will be selected.
5. If such T-Bill matures as well, the proceeds will be invested in TREPS.
6. The T-bills will be weighted equally on each rebalancing date.

4) Any cash flows accruing to the index on account of coupon cash flows, part redemption of the security or securities, will be reinvested on the same day in the index in the proportion of existing weights.
5) As the index includes securities that shall mature during the 6 period ending on the final maturity date of the index, any proceeds from the redemption of securities prior to the final maturity date of the index shall be reinvested according to following waterfall approach –
a) The proceeds from security redemption will be reinvested in the longest maturity outstanding government security issued and maturing on or just before the index maturity date.
b) In case a replacement in the form of another outstanding government security cannot be found for reinvestment then the proceeds from such redemption shall be reinvested in the remaining portfolio on the same date in the proportion of the existing weights.
c) In case due to any reason, it is not possible to meet the requirements stated in point (a) and (b) above, then the proceeds from such redemption shall be reinvested in a T-Bill maturing on or just before the index maturity date.
d) If the last outstanding security (including T-Bill) in the index matures before the final index maturity date, all redemption proceeds shall be assumed to be re-invested in The Clearing Corporation of India Ltd.’s (CCIL) TREPS overnight rate for any subsequent days till the maturity of the index. 

6) The relative weights of the Government securities and asset classes will change due to price movement and will be reset during the 6 monthly rebalancing.
7) While rebalancing (security addition/ deletion/ weights reset), Impact Cost for each asset class will be as follows:
o G-sec: 1.5 bps on each leg (total 3 bps)
o T-bills: 0 bps on each leg (total 0 bps)

Any index having maturity date on a weekend (Saturday and Sunday) or on a holiday, or on an unplanned market off, will mature on the next working day.

Portfolio as on 02 April 2024

Study about Benchmark Index in details

Performance Review of the Fund Managers of ABSL CRISIL IBX Gilt June 2027 Index Fund?

Which Company Owns ABSL CRISIL IBX Gilt June 2027 Index Fund?

Aditya Birla Sun Life AMC Ltd.
Address: One World Center, Tower 1, 17th Floor, Jupiter Mill Compound Senapati Bapat Marg, Elphinstone Road Mumbai – 400013
Website: http://mutualfund.adityabirlacapital.com

Registrar & Transfer Agent:

Computer Age Management Services Ltd.
Address: 7th Floor, Tower II, Rayala Towers, 158, Anna Salai, Chennai – 600002
Website: www.camsonline.com

Is it good to invest in Aditya Birla CRISIL IBX Gilt June 2027 Index NFO?

Guidance for Aditya Birla (ABSL) CRISIL IBX Gilt June 2027 Index Fund by Paresh Gordhandas, C.A., Research Analyst. 

Will Post Soon 

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