Enter constant maturity gilt ETFs with 5-year plan, say analysts

Conservative investors looking to lock in returns should opt for target maturity ETFs/index funds

The new fund offer (NFO) of Nippon India ETF (exchange-traded fund) 5-Year Gilt Fund, which was launched on March 22, ends on Friday. Earlier, Motilal Oswal had also launched a 5-Year G-Sec ETF. In recent times, fund houses like Edelweiss and IDFC have also launched passive index funds and ETFs that invest in AAA PSU bonds, state development loans (SDLs), and government securities (G-Secs). Investors should understand the characteristics of these categories and their own risk profile before making a choice.

Five-year gilt is in a sweet spot

Nippon’s and Motilal’s funds are constant maturity ones. Unlike target maturity funds, they won’t