PGIM India CRISIL IBX Gilt Index Apr 2028 Fund

Target Maturity Funds are structured as passive funds which invest in a mix of SDLs, G-secs, and PSU Bonds. They are not actively managed funds and hence charge a relatively lower expense ratio as compared to actively managed debt funds. Unlike other debt funds, TMFs come with a specified maturity date when generally investors receive their principal along with interest income. However, investors have the option of redeeming their investments even before the maturity.

Target Maturity Funds follow a passive strategy and offer liquidity. Investors who are looking at an alternative to FMPs and if their investment horizon matches with the maturity of the fund, can consider these funds. These funds invest in a high quality portfolio of G-secs, PSU bonds and State Development Loans so the credit risk is relatively low to moderate. TMFs can be a part of investor’s core fixed income portfolio.

Target Maturity Funds are permitted to invest only in G-secs, PSU bonds and State Development Loans that mirror an index. As far as credit risk is concerned, TMFs which solely invest in G-secs have relatively low credit risk. Credit Risk is the possibility of an issuer failing to make a principal and interest payment when due.

These funds carry a relatively high interest rate risk and a relatively low to moderate credit risk. Interest rate risk is the risk associated with changes in prices of securities such as bonds owing to changes in interest rates. The prices of debt securities generally rise as interest rates decline and vice versa. The extent of change in price depends on the existing coupon, days to maturity and the extent of increase or decrease in interest rates. The scheme's risk is indicatedby the Riskometer.

Target Maturity Funds are meant both for new and seasoned investors. One should ideally remain invested till the maturity of the fund.

There are several options to invest.

• Website: You can invest through https://investors.pgimindiamf.com/auth/login by creating your profile and submitting identity details, and bank account information, and becoming KYC compliant.
• RIA/MFD: You can also invest through a Registered Investment Adviser or Mutual Fund distributor registered with SEBI/AMFI.
• Industry Portal: You can also invest through MF Utility or MF Central portals.

Do consult your financial advisor before investing to understand if the fund fits into your risk profile.

Each fund in this category comes with a different maturity date. For instance, some funds will mature in 2026 while others in 2028. Hence, your investment horizon should ideally match with the fund’s maturity. Since they are open-ended, TMFs provide you the choice of redeeming before the maturity of the fund.

TMFs are structured as debt funds.

• *Short Term Capital Gain Tax: Gains arising out of investments redeemed before 36 months are treated as short term capital gains tax and taxed as per your slab rate.

• *Long Term Capital Gain Tax: Gains arising out of investments redeemed after 36 months are treated as long term capital gains and taxed at 20% with indexation benefit.

   * Applicable for investments made till March 31, 2023. Gains arising out of investments made from April 1, 2023, are taxed as per your slab rate. Long term capital gains tax and indexation benefit will no longer be available for such investments.

No indexation benefits on units sold or redeemed on or after 23 July 2024.

Taxed at the investor’s slab rate irrespective of the holding period. Indexation benefit is no longer available.

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