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NEW DELHI: Kotak Mahindra Asset Management Company Ltd on Friday announced the launch of an open-ended target maturity index fund, Kotak Nifty SDL April 2032 Top 12 Equal Weight Index Fund.

The new fund will invest in State Development Loans (SDLs) issued by state governments and union territories that form part of Nifty SDL Apr 2032 Top 12 Equal Weight Index, keeping in view the growing size of the Indian debt market.

The New Fund Offer (NFO) will open for subscription on 4 February and close on 9 February. The fund is an open-ended scheme and investors can invest till maturity.

"In order to meet the liquidity requirements of the scheme, a small portion of the corpus will also be invested in the Sebi and RBI permitted instruments such as commercial papers, certificate of deposits, treasury bills, etc," Kotak Mahindra AMC added.

"India's debt market has been growing in size over the past few years and investors, especially retail participants, can own a pie of state debt through this launch. This will also help investors to diversify their investments and get the carry advantage via sovereign ownership," said Lakshmi Iyer, CIO-debt and head of products, Kotak Mahindra Asset Management Company Ltd.

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