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Home / Money / Personal Finance /  Tata Mutual Fund launches G-Sec-focused target maturity fund
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Tata Mutual Fund has announced the launch of Tata CRISIL-IBX GILT Index – April 2026 Index Fund, an open-ended target maturity index fund that will invest in the constituents of the CRISIL-IBX Gilt Index – April 2026.

Target maturity funds which come with a defined maturity have gained in popularity in recent years. They offer a certain degree of return predictability to those who remain invested in them until maturity. Their high credit quality also makes them a safe bet from a credit risk perspective. According to the fund house, the scheme will help investors capture the currently high G-Sec (government security) yields. The new fund offer will be open from September 23 to September 28. The minimum subscription amount is Rs. 5,000 per application and in multiples of Re 1 thereafter.

Commenting on the fund launch, Amit Somani, senior fund manager-fixed income at Tata AMC said, “Over the past 1 year, yield levels have risen on account of rate hikes, excess liquidity withdrawn, and economy coming out of Covid shock. Currently within G-secs, the 3-4-year segment may be looked at. The spread between the 1-year and 3-3.5 years is more than 60 basis points making that part of the yield curve steep. Going into the RBI policy on September 30, markets may price in another large rate hike by RBI."

Target maturity funds offer a tax advantage over bank FDs for those with an investment horizon of at least three years. Your return from these funds - the capital gain, if any, when you redeem your investment after holding for 3 years or longer – gets taxed at a flat rate of 20% plus 4% cess after applying indexation benefit. Under indexation, your capital gain is calculated as the difference between the sale value of the fund units and their indexed cost of purchase. This can bring down your capital gains for taxation purposes substantially.

SBI Mutual Fund, too, recently launched G-Sec-focused target maturity funds.

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