UTI Nifty 10 yr Benchmark G-Sec ETF

About UTI Nifty 10 yr Benchmark G-Sec ETF (NIF10GETF)

• The UTI Nifty 10 yr Benchmark G-Sec ETF is an open-ended scheme offered by the UTI Mutual Fund House.
• It invests in Central Government securities with a residual maturity of about 10 years.
• The ETF was launched on January 29, 2024.
• Jaydeep Bhowal is the fund manager.
• The index periodically adds new 10-year G-Secs that satisfy certain requirements to its composition. This ensures it stays in line with the rates on government bonds and the state of the market.
• Investment in this scheme can be made directly by buying the ETF units through a demat account with a registered broker.
• The ETF units can be traded during the usual market hours

Investment Objective and Benchmark

• The UTI Nifty 10 yr Benchmark G-Sec ETF is an open-ended ETF, tracking the Nifty 10 yr Benchmark G-Sec Index.
• The scheme’s investment objective is to yield returns that mirror the performance of the securities that the underlying index represents.
• Investors seeking long-term capital appreciation and investments in securities covered by the Nifty 10-year Benchmark G-Sec Index might consider this product.
• The ETF provides a good option for investing in government assets backed by the sovereign guarantee, ensuring consistency and dependability.
• The ETF mirrors the Nifty 10 yr Benchmark G-Sec Index, which has stringent selection criteria for the securities that make up its portfolio and places a special emphasis on liquidity when it comes to risk management.
• The ETF’s diversified portfolio strategy is intended to mitigate interest rate risk by minimising the effect of changes in interest rates on bond prices.
• It follows a passive investment strategy that minimises tracking errors and closely matches the performance of the index, reducing volatility as compared to actively managed funds.

Asset allocation and portfolio composition

• The UTI Nifty 10 yr Benchmark G-Sec ETF allocates 95% to 100% of its total assets to securities covered by the Nifty 10 yr Benchmark G-Sec ETF.
• Apart from that, up to 5% of the assets are allocated to money market instruments, including tri-party repo on government securities or T-bills, cash and cash equivalents, or liquid category mutual funds.
• The fund may allocate investments to liquid schemes of UTI MF and other SEBI-registered mutual funds that usually invest in various money market instruments.
• The UTI Nifty 10 yr Benchmark G-Sec ETF’s top holding includes 7.1% Government Stock 2030, with a significant portfolio weight of 98.28%.
• When compared to the Nifty 10-year Benchmark G-Sec Index, the UTI Nifty 10 yr Benchmark G-Sec ETF has performed better, with a compound annual growth rate (CAGR) of 4.28% since inception than the benchmark’s 3.83%.