Motilal Oswal Asset Management Company has launched the Motilal Oswal Nifty G-sec May 2029 Index fund. This is the first target maturity scheme launched by the AMC. The scheme will track the Nifty G-sec May 2029 Index. The fund re-opens for investors on March 10.

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According to the fund house, the scheme will invest in government securities similar to that of the underlying index. The index will hold in equal proportion three government securities maturing in 2029.

Target maturity funds have become very popular since the launch of Bharat Bond Fund in 2019. The AMC believes that the G-secs, particularly in the 4–6 year segment, are attractive at the moment and target maturity fund can be looked at as a good option to lock-in investor money.

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Pratik Oswal, Head of Passive Funds, Motilal Oswal Asset Management Company Ltd, said, “Following the rapid hike in policy rates over last year, the inflation has broadly moved in RBI’s comfort zone thus reducing pressure for further hike in interest rates. This presents an attractive opportunity for investors to invest at these levels, as the yields seem to have peaked out. Investors wanting to lock-in at these levels can turn to target maturity funds, as these funds provide high visibility of returns if held till maturity”.

Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd, said, “Target maturity fund (TMF) segment has seen phenomenal growth in past couple of years. From being non-existent couple of years back to having more than 70 funds managing Rs 1.5 lakh crore, this segment has come a long way. Several factors have contributed to the success of these funds, particularly the return visibility. We are excited to enter into this space with the launch of this fund.”

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