Axis Nifty SDL September 2026 Debt Index Fund: Check key features here

Axis Mutual Fund has launched a new fund Axis Nifty SDL September 2026 Debt Index Fund, which is an open-ended target maturity index fund that would put money in companies of Nifty SDL Sep 2026 Index. The fund house has labelled the new fund as a relatively high-interest rate risk and relatively low credit risk as it would track the Nifty SDL Sep 2026 Index. The new fund offer (NFO) is open for subscription from November 04, 2022, to November 16, 2022. 

As per the fund house, the scheme’s investment objective is to provide adequate investment returns corresponding to the total returns of the securities as represented by the Nifty SDL Sep 2026 Index before expenses, subject to tracking errors.  

However, there is no assurance that the investment objective of the scheme will be achieved, the fund house has stated. With Aditya Pagaria helming the fund, the minimum investment amount would be Rs. 5,000 and in multiples of Rs. 1/- thereafter. 

Target maturity funds allow investors to access specific maturity buckets. The transparent nature of such a strategy provides investors with a clear picture of the portfolio and the instrument mix. As a passive fund, the Axis Nifty SDL September 2026 Debt Index Fund aims to replicate a designated index created by reputed index providers. 

Key features 

The Axis Nifty SDL September 2026 Debt Index Fund aims to follow a low friction investment strategy by tracking a pre-specified benchmark/index as closely as possible. It is ideal for investors looking to create a high-quality passive debt portfolio with a relatively longer investment horizon.  

The fund will be managed by NSE Indices Limited. Currently, the Nifty SDL Index Sep 2026 is a portfolio of State Development Loans (SDLs) maturing between April 01, 2026, and September 30, 2026. Rebalanced semi-annually, the index comprises a highly liquid portfolio of SDLs issued by 15 states based on the following parameters: 

Investors should note that the minimum issue size of Rs 500 crore. With emphasis on liquidity, the index will be evaluated basis of volume and frequency of trading in underlying securities. It has weighted basis liquidity and size of issuance to ensure portfolio liquidity.  

Besides, investors may consider the following features while choosing the fund:

Low-Cost Passive Investment: A hassle-free solution for investors looking for a low-cost fixed income product.

No Bias in Security Selection: As the fund is passively managed and invests in the constituents of Nifty SDL – Sep 2026 Index, there is no bias in security selection. 

Simple and Easy: Target maturity and high-quality SDL portfolio with the benefit of indexation. 

“We believe that the Axis Nifty SDL September 2026 Debt Index Fund will be a notable add-on to our offerings in the passive debt side. Investors can leverage the benefit of a consistent style (as index represents a defined set SDLs issued by state governments) and a relatively lower risk exposure (as the index fund offers a well-defined mix sovereign exposure by way of SDLs) in addition to lower expenses and market linked returns. As a fund house that believes in ‘responsible investing’, we are offering investors the opportunity to invest in quality assets,” said Chandresh Nigam, MD & CEO, Axis AMC.  

Why opt for State Development Loans
SDLs are state government securities issued to meet budgetary expenses and implement development projects. SDLs are one of the most liquid instruments traded in the Indian debt market. They typically trade at a premium to comparable government securities. The RBI has raised policy rates by ~190 bps between April ‘22 to September ’22 to combat rising inflation. This has resulted in a sharp retracement across the short end of the curve (1-3 Year segment) even as the long end of the curve remains anchored. Today, the flat yield curve offers opportunities for investors in the 3 to 5-year segment from a risk-reward standpoint. Hence, the Axis Nifty SDL September 2026 Debt Index Fund offers an ideal investment opportunity for investors looking to lock in rates over the 3.5-year investment opportunity.