LIC Nomura files for debt ETF

ETF allows for exposure to a basket of securities, and units of fund can be bought and sold on exchange like stocks

LIC Nomura has filed for an exchange traded fund focused on investing in government securities issued by the state or central governments.

The scheme will also invest in money market instruments up to 20% of its assets under management (AUM) to protect against adverse interest rate movements, according to a document filed with the stock market regulator, the Securities and Exchange Board of India (Sebi).

An exchange traded fund (ETF) allows for exposure to a basket of securities, and units of the fund can be bought and sold on the exchange like stocks.

The minimum application amount has been pegged at Rs 1 lakh. The minimum target amount, or the least amount required for the new fund offer to go through is Rs 1 crore.

The fund would keep a close eye on the macroeconomic situation while attempting to meet its investment objective, according to the document.

“The fund management team will take an active view of the interest rate environment by keeping a close watch on various Parameters of the Indian economy like, government's borrowing program, level of liquidity in the banking system, inflation levels and overall macro economic growth of the country,” it said.

Killol Pandya, Senior Debt Fund Manger, at LIC Nomura will manage the fund added the document.