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Wednesday, June 01, 2016

SBI Mutual Fund SBI-ETF 10 Year Gilt


-         SBI-ETF 10 Year Gilt is SBI Mutual Fund’s 1st Fixed Income ETF
-         SBI-ETF 10 Year Gilt would predominantly invest in Securities covered by the Nifty 10 year Benchmark GSec Index

-         NFO period – June 02, 2016 to June 08, 2016; Scheme reopens for ongoing subscription from on or before June 22, 2016

SBI Mutual Fund, amongst India’s leadingfund housetodayannounced the launch of its first-ever Fixed Income ETF,SBI-ETF 10 Year Gilt, an open-ended exchange traded scheme. ETFs, in addition to being cost effective, offer liquidity, portfolio diversification and above all provide transparency.

The scheme would invest up to a minimum of 95 per cent in securities covered by the Nifty 10 year benchmark GSec Index, which have a medium to high risk profile, and residual up to 5 per cent in Money Market instruments including CBLO, which have a low risk profile.

The investment objective of the SBI-ETF 10 Year Gilt is to provide returns that closelycorrespond to the total returns of the securities as represented by the underlying index, subject to tracking error.

Speaking on the occasion, Mr. Navneet Munot, CIO, SBI Mutual Fund said: “We are happy to launch our first ever fixed income ETF – SBI-ETF 10 Year Gilt. The 10 year gilt segment is one of the most liquid fixed income segments in the Indian debt market.The ETFs too, owing to low costs, occupy unique position in the investment landscape and are listed on the stock exchanges.”

The fund manager would rebalance the portfolio, based on the fresh issuance of a new 10 year G-sec.SBI-ETF 10 Year Gilt may invest in derivatives at the time of portfolio rebalancing, albeit for a shortperiod of time. The exposure of the Schemes in Derivative instruments shall however, be restricted to 5 per cent of the net assets of the Scheme. For more information on the asset allocation, please refer to the Scheme Information Document.

The changes in interest rates affect the prices of bonds as well as equities. If interest rates rise the prices of bonds fall and vice versa. Equity might be negatively affected as well, in a rising interest rate environment. A well-diversifiedportfolio therefore would help mitigate this interest rate risk.

ETFs, being a passive investmentcarry lesser risk as compared to active fund management. The portfolio follows theindex and therefore the level of stock concentration in the portfolio and its volatility would be the same as that of the index, subject to tracking error. Thus there is no additional element of volatility or stock concentration on account offund manager decisions.

The fund manager would endeavour to keep cash levels at the minimal to control tracking error.

The Scheme would take no active calls and manage the fund by tracking the underlying index. The Scheme will track Nifty 10 year Benchmark G-Sec Index and will use a “passive” or indexing approach in its endeavour to achieve scheme’s investment objective. Unlike other funds, the scheme will not try to “beat” the market it track anddo not seek temporary defensive positions when market decline or appear overvalued.

Since the scheme is an exchange traded fund, the scheme will only invest in the securities constituting the underlying index. However, due to changes in underlying index the scheme may temporarily hold securities which are not part of the index. These investments which fall outside the underlying index as mentioned above shall be rebalanced within a period of 30 days.

The units of the SBI-ETF 10 Year Gilt would be available in the Dematerialized(electronic) mode.The applicant under the Scheme will be required to have a beneficiaryaccount with a Depository Participant of NSDL/CDSL and will be required to indicate in the application the DP’s name, DP ID Number and beneficiary account number of the applicant with the DP.

The units of the SBI-ETF 10 Year Gilt can be bought / sold on all trading days on the NationalStock Exchange of India Limited where the scheme is proposed to be listed. SBI-ETF 10 Year Gilt would also offer units for subscription / redemption directly with SBI Mutual Fund in creation unit size to Authorized Participants / and Large Investors, on applicable NAV prices on all Business Days on-going offer period.

The NFO period for SBI-ETF 10 Year Gilt starts from June 02, 2016 to June 08, 2016. The scheme, thereafter, reopens for on-going subscription from on or before June 22, 2016. No Entry or Exit Load is applicable.

The minimum application amount is INR 5,000 in multiples of INR 1 thereafter during the NFO period. The benchmark for this scheme is Nifty 10 year Benchmark G-Sec Index.

The Fund Manager for SBI-ETF 10 Year Gilt is Mr. Mahak Khabia. Mr Khabia, armed with B. Com, MBA - Finance, FRM, CFA, joined SBI Funds Management Private Limited as a Dealer – Fixed Income in 2014, and has over six years of experience in the capital market.

About SBI Funds Management Pvt. Ltd.
With over 28 years of rich experience in fund management, we at SBI Funds Management Pvt. Ltd. bring forward our expertise by consistently delivering value to our investors. We have a strong and proud lineage that traces back to the State Bank of India (SBI) - India's largest bank. We are a Joint Venture between SBI and AMUNDI (France), one of the world's leading fund management companies. With a network of 163branches across India, we deliver value and nurture the trust of our vast and varied family of investors.

Excellence has no substitute. And to ensure excellence right from the first stage of product development to the post-investment stage, we are ably guided by our philosophy of ‘growth through innovation’ and our stable investment policies. This dedication is what helps our customers achieve their financial objectives.


For further information please contact:
SBI Mutual fund
Ketchum Sampark
Prashant Sarangi
+91 9819855275
Zohar Reuben
91 9820920816


Mutual Fund investments are subject to market risks, read all scheme related documents carefully.


SBI Mutual Fund SBI-ETF 10 Year Gilt Reviewed by S. Chitra on June 01, 2016 Rating: 5 -          SBI-ETF 10 Year Gilt is SBI Mutual Fund’s 1 st Fixed Income ETF -          SBI-ETF 10 Year Gilt would predominantly invest ...

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