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In a move catering to investors seeking a low-risk, highly liquid short-term parking option for surplus funds, SBI Mutual Fund — India’s largest fund house — has launched a new Exchange Traded Fund: SBI NIFTY 1D Rate Liquid ETF – Growth. The New Fund Offer (NFO) for this open-ended scheme opened on August 4, 2025, and will close on August 7, 2025.
This ETF is designed to track the NIFTY 1D Rate Index, which captures the performance of market participants lending overnight with government securities as collateral — a market known for its low credit and interest rate risk. The ETF is structured to provide relatively stable returns by investing in short-term overnight instruments, making it ideal for investors looking for high liquidity and capital safety.
Key Features of the SBI NIFTY 1D Rate Liquid ETF – Growth
Scheme Type: Open-ended Exchange Traded Fund
Benchmark Index: NIFTY 1D Rate Index
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Fund Manager: Mr. Jignesh Shah, who also manages the SBI Nifty 10yr Benchmark G-Sec ETF and SBI Nifty 1D Rate Liquid ETF – IDCW
NFO Dates: August 4 – 7, 2025
Offer Price: ₹1,000 per unit
Liquidity: Units will be listed and traded on the stock exchange
Risk Profile: Relatively low interest rate risk and low credit risk
Minimum Investment: As per exchange norms applicable during listing
What does the fund invest in?
The fund will primarily allocate 95% to 100% of its assets to:
Tri-party Repos (TREPS)
Repos in Government Securities
Reverse Repos
Any other similar overnight instruments as permitted by the RBI and SEBI
Up to 5% of the fund's assets may be held in cash and cash equivalents.
Why This ETF may appeal to investors?
Short-Term Liquidity Solution
Designed for parking idle money temporarily, this ETF offers a liquid alternative to traditional savings accounts or ultra-short-term debt funds.
Low Volatility
The NIFTY 1D Rate Index reflects overnight lending rates, which are less volatile than medium- or long-duration fixed income instruments.
Market-Based Returns
While it’s not guaranteed, the ETF aims to generate returns that closely mirror overnight repo rates. These returns are generally competitive with traditional liquid fund returns.
Transparency & Flexibility
As an ETF, it provides daily NAV disclosures, intraday liquidity on exchanges, and better visibility into underlying portfolio movements
What Is the NIFTY 1D Rate Index?
This index is designed to measure the performance of participants in the overnight money market, lending against government securities as collateral. It reflects the 1-day rate, also known as the overnight repo rate, which is largely stable and driven by RBI’s liquidity and rate management policy.
The NIFTY 1D Rate Index is frequently used by institutional investors, treasuries, and fund managers as a benchmark for ultra-short-term investments.
Investment objective
The investment objective of the scheme is to generate returns, before expenses, that correspond to the returns of the NIFTY 1D Rate Index, subject to tracking error. However, there is no guarantee or assurance that the investment objective of the scheme would be achieved.
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