Target Maturity Index Funds are passively managed debt funds with pre-defined maturity dates. These funds buy and hold similar maturity bonds that are included in the underlying bond index. Target Maturity Index Fund serves as an alternative to Fixed Deposits offered by banks, as in the current scenario, interest rates on the deposits are relatively low.
Target Maturity Index Funds offer relatively better-yielding investments by taking advantage of spread assets, and the roll-down maturity feature helps achieve risk-adjusted performance. These funds carry comparatively lower interest rate risk and provide more predictive and stable returns, which is suitable for investors who prefer the predictability of returns like the one offered by bank deposits. If investors hold these funds till maturity, they can expect to earn the indicative yields. Thus, investing in target maturity funds makes sense when interest rates are at their peak.
The combination of excessive liquidity/low rates and improving growth/elevated inflation/demand-supply imbalance has resulted in a steep yield curve. Investors can potentially benefit from the current steepness in rates by investing in Target Maturity Funds.
TATA Mutual Fund has launched TATA CRISIL IBX Gilt Index – April 2026 Index Fund; it is an open-ended Target Maturity Index Fund predominately investing in constituents of CRISIL IBX Gilt Index – April 2026. A Scheme with Relatively High-Interest Rate Risk and Relatively Low Credit Risk. The scheme’s open-ended structure provides quick liquidity to investors while aiming to capture the current high government securities (G-Secs) yield.
Table 1: Details of TATA CRISIL IBX Gilt Index – April 2026 Index Fund
| Type | An open-ended Target Maturity Index Fund is predominately investing in constituents of CRISIL IBX Gilt Index – April 2026. A Scheme with Relatively High-Interest Rate Risk and Relatively Low Credit Risk. | Category | Debt Index Fund |
| Investment Objective | The investment objective of the scheme is to provide returns that correspond to the total returns of the securities as represented by the underlying index, subject to tracking error. There is no guarantee or assurance that the investment objective of the scheme will be achieved. The scheme doesn't assure or guarantee any returns. | ||
| Min. Investment | Rs 5,000 and in multiples of Re 1/- thereafter. Additional Purchase Rs 1,000/- and in multiples of Re. 1 thereafter. | Face Value | Rs 10/- per unit |
| SIP/SWP/STP | Available | ||
| Plans |
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Options |
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| Entry Load | Not Applicable | Exit Load | 0.25 % of the applicable NAV, if redeemed on or before 30 days from the date of allotment. |
| Fund Manager | Mr Amit Somani | Benchmark Index | CRISIL-IBX Gilt Index – April 2026 (TRI) |
| Issue Opens | September 23, 2022 | Issue Closes | September 28, 2022 |
(Source: Scheme Information Document)
The investment strategy for TATA CRISIL IBX Gilt Index – April 2026 Index Fund will be as follows:
Tata CRISIL-IBX Gilt Index – April 2026 Index Fund is a passively managed debt index fund which will employ an investment approach designed to track the performance of CRISIL-IBX Gilt Index – April 2026. The scheme seeks to achieve this goal by investing in securities constituting the underlying Index in the same proportion as in the Index.
The scheme’s performance may not be commensurate with the performance of the respective benchmark of the scheme on any given day or over any given period. Such variation is commonly referred to as tracking error. The scheme intends to maintain a low tracking error by actively managing the portfolio in line with the Index.
The Scheme’s exposure to money market instruments will align with the Asset Allocation table. However, in the case of maturity of instruments in the scheme portfolio, the reinvestment will be in line with the index methodology.
Under normal circumstances, the Asset Allocation will be as under:
Table 2: Asset Allocation for TATA CRISIL IBX Gilt Index – April 2026 Index Fund
| Instruments | Indicative Allocation (% of net assets) | Risk Profile | |
| Minimum | Maximum | High/Medium/Low | |
| Securities covered by CRISIL-IBX Gilt Index – April 2026 | 95 | 100 | Medium to Low |
| Government Securities maturing on or before the maturity date of the Scheme, Money Market Instruments and units of debt-oriented mutual fund schemes. | 0 | 5 | Medium to Low |
(Source: Scheme Information Document)
About the benchmark
CRISIL-IBX Gilt Index – April 2026 seeks to track the performance of G-Sec securities maturing near the maturity date of the Index, which is 30 April 2026. It is a target maturity index that follows security selection as below:
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Securities with the minimum outstanding of Rs. 25000 crores – Surrogate bonds, STRIPS and Floating rate bonds are ineligible.
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Liquidity Score (70%) + Amount Outstanding (30%) – The liquidity score is calculated based on the volume traded (70%), number of trades (15%), and days traded (15%) in the previous quarter.
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The securities are rebalanced and reconstituted every 6 months, and weights will be redistributed based on the ratio of the Amount outstanding (30% weightage) and liquidity score (70% weightage).
Here’s the list of constituent issuers under the CRISIL-IBX Gilt Index – April 2026:
(Source: TATA CRISIL IBX Gilt Index – April 2026 Index Fund PPT)
Note that weights under the Index will be reset semi-annually.
Who will manage TATA CRISIL IBX Gilt Index – April 2026 Index Fund?
The designated fund manager for this scheme is Mr Amit Somani. He is a CFA, B.com graduate and holds a PGDBM degree, and he has an overall experience of 21 years in the financial services industry. Prior to joining TATA AMC, he was associated with Fidelity Investments as Research Associate, Netscribes Pvt. Ltd. as a Research analyst, SPA Capital as a debt market dealer and Khandwala Securities as a debt market dealer.
At TATA Mutual Fund, Mr Somani currently manages Tata Banking & PSU Debt Fund, Tata Money Market Fund, Tata Liquid Fund, Tata Overnight Fund, and Tata Nifty SDL Plus AAA PSU Bond Dec 2027 60:40 Index Fund.
Fund Outlook – TATA CRISIL IBX Gilt Index – April 2026 Index Fund
TATA CRISIL IBX Gilt Index – April 2026 Index Fund is a passively managed debt index fund that aims to replicate the performance of the CRISIL IBX Gilt Index – April 2026, subject to tracking error. The scheme offers safety with relatively low credit risk by investments in G-Sec securities.
The fund will invest in government-backed securities with a pre-defined maturity period. It reduces credit risk for investors and provides an opportunity to build their debt portfolio at a low cost. The scheme focuses on the rich steepness of the curve vs the shorter end. It aims at the 3-4year target maturity segment, which looks attractive considering the volatile outlook on long-term securities. The scheme provides investors with a portfolio of quality papers with no duration risk when held until maturity and offers better risk-adjusted performance and liquidity.
Although the scheme invests in government-backed securities with low credit risk, it is still prone to interest rate risks. In addition, the recent 50 basis point increase in interest rates by the RBI maintains the rising interest rate environment, which is unfavourable for debt funds. However, since this scheme does not invest in long-duration papers, it will be relatively better off. If there are adverse developments, such as a worsening geo-political scenario, rising inflation, and a massive increase in government borrowings, bond yields can go up further, and investors should be prepared for some volatility. These factors, among others, may have an adverse impact on the scheme’s performance.
The fortune of this scheme will depend on the performance of the underlying Index. Thus, TATA CRISIL IBX Gilt Index – April 2026 Index Fund is suitable for investors with moderate risk appetite seeking to invest in high credit quality bonds with good liquidity. Ensure that you have an investment horizon suitable to the pre-defined target maturity period of the fund.
This article first appeared on PersonalFN here
