Description

Edelweiss Mutual Fund announces merger of CRISIL PSU Plus SDL 50:50 Oct 2025 Index Fund with Banking and PSU Debt Fund, effective October 31, 2025.

Summary

Edelweiss Trusteeship Company Limited has approved the merger of Edelweiss CRISIL PSU Plus SDL 50:50 Oct 2025 Index Fund (Merging Scheme) with Edelweiss Banking and PSU Debt Fund (Transferee Scheme). The merger is effective October 31, 2025, upon the maturity date of the Merging Scheme. Unit holders have the option to provide consent or exit during the period from September 30, 2025 to October 29, 2025.

Key Points

  • Merging Scheme: Edelweiss CRISIL PSU Plus SDL 50:50 Oct 2025 Index Fund (open-ended target maturity index fund)
  • Transferee Scheme: Edelweiss Banking and PSU Debt Fund (open-ended debt scheme)
  • Effective Date: October 31, 2025 (or next business day if non-business day)
  • Consent/Exit Period: September 30, 2025 to October 29, 2025 (both days inclusive)
  • Merging Scheme has ~50% exposure to AAA-rated CPSE bonds and remaining in State Development Loans (SDLs)
  • Transferee Scheme has ~78% exposure to AAA-rated CPSE bonds and AAA-rated banks, remaining in government bonds
  • Tax efficiency maintained under Section 47(xviii) of Income-tax Act, 1961

Regulatory Changes

No regulatory changes. This is a scheme merger notification as per mutual fund regulations.

Compliance Requirements

  • Unit holders must provide consent or exercise exit option during the specified period (September 30 to October 29, 2025)
  • Unit holders not providing consent or exit will automatically be transferred to the Transferee Scheme
  • No action required from unit holders who wish to continue with the merged scheme

Important Dates

  • Consent/Exit Option Period Begins: September 30, 2025 (Tuesday)
  • Consent/Exit Option Period Ends: October 29, 2025 (Wednesday)
  • Effective Date of Merger: October 31, 2025 (maturity date of Merging Scheme)

Impact Assessment

Positive Impacts:

  • Enhanced credit quality with higher exposure to AAA-rated CPSE and bank bonds
  • Superior liquidity risk management through exposure to more liquid CPSE bonds and government bonds
  • Mitigation of reinvestment risk as Transferee Scheme is open-ended without fixed maturity
  • Benefits of active duration management based on market conditions
  • Greater diversification across AAA-rated CPSE and bank bonds, maturity buckets, and CPSE segments
  • Tax efficiency maintained - allotment in Transferee Scheme not considered redemption under Section 47(xviii)

Rationale:

  • Comparable credit quality between schemes with improved exposure profile
  • Similar asset allocation with high-quality debt exposure
  • Active management benefits over longer investment horizon
  • Periodic portfolio rebalancing opportunities

Affected Parties:

  • Current unit holders of Edelweiss CRISIL PSU Plus SDL 50:50 Oct 2025 Index Fund
  • Must decide whether to consent to merger or exit during specified period

Impact Justification

Affects specific mutual fund investors with option to consent or exit; routine scheme merger with tax efficiency maintained