Nippon India Launches Nifty Financial Services 9-12 Months Debt Index Fund to Offer Stable, Low-Risk Returns

Mumbai, 23 July 2025: Nippon India Mutual Fund (NIMF) has announced the launch of its Nifty Financial Services 9 to 12 Months Debt Index Fund, a targeted-duration debt index scheme designed to appeal to conservative investors seeking short-term, low-volatility returns. The New Fund Offer (NFO) opens on 28 July 2025 and will close on 4 August 2025. The scheme will reopen for regular subscriptions and redemptions by 14 August 2025.

Short-Term Debt Index Fund Launched to Offer Predictable Income with Low Volatility

The primary investment objective of this open-ended scheme is to generate returns in line with the Nifty Financial Services 9–12 Months Debt Index, after accounting for expenses. The fund adopts a passive investment strategy, committing at least 95% of its assets to securities that constitute the benchmark index. This index comprises AAA-rated Commercial Papers (CPs), Certificates of Deposit (CDs), and short-term bonds, all with maturities ranging from 9 to 12 months. This structure aims to provide stable returns with relatively low interest rate and credit risk.

NFO Opens July 28 With Low Investment Barrier and No Exit Load

The fund’s New Fund Offer begins on 28 July 2025 and runs until 4 August 2025, with re-entry for investors on or before 14 August 2025. The minimum investment is ₹1,000, with increments of ₹1 thereafter. Investors are offered high liquidity and flexibility, as the fund carries no exit load. The Net Asset Value (NAV) will be published daily by 11:00 p.m. on business days, ensuring complete transparency.

Index-Linked Portfolio Offers 20 Equal-Weighted Issuers for Balanced Exposure

According to data from the National Stock Exchange (NSE) dated 10 June 2025, the fund’s underlying benchmark is equally weighted across 20 leading issuers, each comprising 5% of the index. Key constituents include:

• HDFC Bank Ltd. (CD, Maturity: May 19, 2026)
• Power Finance Corporation (Bonds, Maturity: May 22, 2026)
• LIC Housing Finance (CP, Maturity: March 18, 2026)
• Tata Capital Ltd. (CP, Maturity: May 21, 2026)
• REC Ltd. (Bonds, Maturity: May 30, 2026)
• Bajaj Finance Ltd. (CP, Maturity: May 26, 2026)

This diversified mix across top-tier financial institutions ensures that the fund maintains a steady risk-return profile while providing liquidity and capital preservation.

Fund Structure Prioritises Conservative Risk with Defined Asset Allocation

The asset allocation strategy mandates a minimum 95% investment in the benchmark index’s debt securities, with up to 5% reserved for money market instruments and cash equivalents. The fund strictly avoids higher-risk instruments such as derivatives, overseas securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), or structured obligations. This disciplined framework maintains a relatively low risk profile suitable for short-term fixed-income investors.

Additional Features Support Investment Flexibility and Ease of Access

The scheme includes a full suite of investor-friendly features post-NFO, such as:

• Systematic Investment Plan (SIP)
• Systematic Transfer Plan (STP)
• Systematic Withdrawal Plan (SWP)
• Auto-switch facility and ASBA application during NFO
• Switch-in option from select ETF schemes in defined basket size

With no upfront commission and an expense ratio capped at 1.00%, the fund remains accessible and cost-effective for retail and institutional investors alike.

Managed by Experienced Professionals with Expertise in Debt Markets

The fund will be co-managed by two experienced professionals:

• Mr. Vikash Agarwal, a Chartered Accountant with a Master’s in Finance and over 19 years of experience in managing liquid and arbitrage strategies.
• Mr. Vivek Sharma, an engineering graduate with a PGDBM in Finance and 18 years of experience in fixed income portfolio management, including short-duration and corporate bond funds.

Their combined expertise ensures robust oversight and alignment with market trends.

Regulatory Compliance and Transparency Reinforce Investor Confidence

The NAV will be published daily on both the AMFI and Nippon India Mutual Fund websites. Portfolio holdings will be disclosed fortnightly and monthly, in line with SEBI mandates. The scheme will also aim to keep the annual tracking error below 1.25%, adhering to SEBI’s index fund regulations and maintaining close correlation with the benchmark.

Nippon India Mutual Fund Expands Passive Offerings with Focused Debt Strategy

Nippon India Mutual Fund, managed by Nippon Life India Asset Management Ltd. (NAM India), is one of the largest mutual fund houses in the country. With a vast network across urban and semi-urban regions, NAM India offers a wide portfolio of equity, debt, hybrid, and passive funds. The launch of this latest index fund adds to its growing passive product lineup, designed for investors seeking low-risk, duration-specific exposure within the flexible structure of a mutual fund.

By introducing the Nifty Financial Services 9–12 Months Debt Index Fund, Nippon India continues to provide tailored investment solutions that cater to the evolving needs of conservative investors looking for capital stability and predictable returns in the debt segment.

REF: https://portal.amfiindia.com/spages/14272.pdf

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