List of the Top Target Maturity Funds in India (2026)

Planning investments around a specific timeline can be challenging, especially when balancing returns and interest-rate risk. Target maturity funds aim to address this by offering a more structured way to approach debt investing. These funds invest in debt instruments that mature around a predefined year, which helps align the portfolio with a specific investment horizon.

While returns are not fixed and can vary based on interest rates and market conditions, target maturity funds can offer better visibility on maturity profile and portfolio structure. Below is a list of target maturity funds in India, along with key details on what target maturity funds are, how they work, their benefits, risks, and factors to consider before investing.

Top Target Maturity Funds in India

Here is a list of the top target date funds in India based on their 3Y CAGR, along with Aum and expense ratio.

Disclaimer: Please note that the above list of Target Maturity Funds is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Mutual Fund Screener and is subject to real-time updates.

Note: The data on the list of target maturity funds is from 16th April 2026. This data is derived from the Tickertape Mutual Funds Screener.

• Plan: Growth
• Category: Target Maturity Fund
• 3Y CAGR: Sorted from highest to lowest

Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.

What are Target Maturity Funds?

Target maturity funds are open-ended passively managed debt mutual funds that track a specific bond index and have a predefined maturity date. The passive index-tracking structure means the portfolio composition and credit quality are determined by the underlying index, not by active fund manager decisions.

Key characteristics of target maturity funds include:

• Defined maturity date aligned with the bond maturities in the portfolio
• Passive management tracking a specific bond index
• Investment in high credit quality instruments: G-secs, SDLs, AAA-rated PSU and CPSE bonds
• Roll-down strategy where portfolio duration reduces as maturity approaches
• Open-ended structure allowing entry and exit at any time during the fund’s tenure
• Yield visibility at the time of investment, making return expectations more transparent than actively managed debt funds

How Do Target Maturity Funds Work?

Target maturity funds follow a roll-down strategy. The fund invests in a portfolio of bonds with maturities aligned to the fund’s target date. As time passes, the bonds held in the portfolio approach their maturity date, and the overall portfolio duration naturally reduces. This is distinct from actively managed duration funds, in which the fund manager adjusts duration based on interest-rate views.

The roll-down mechanism provides two important properties for investors:

• Yield Lock-in: Investors who enter the fund when its portfolio yield is at a certain level can broadly expect to earn returns close to that yield if they hold the fund until maturity, assuming all bonds are held to maturity, and coupons are reinvested at similar rates.
• Declining Interest Rate Risk: As the fund approaches its maturity date, the portfolio duration shortens. This means the fund becomes progressively less sensitive to interest rate movements over time, reducing the risk of mark-to-market losses for investors who hold closer to maturity.

Overview of Top Target Maturity Funds

• Invesco India Nifty G-sec Sep 2032 Index Fund: This fund tracks the Nifty G-sec Sep 2032 Index and invests in central government securities maturing in September 2032. Managed by Invesco Mutual Fund, it provides investors with a long-dated sovereign bond exposure with a defined maturity horizon of 2032. 
• SBI CRISIL IBX Gilt Index – June 2036 Fund: Managed by SBI Mutual Fund, this fund tracks the CRISIL IBX Gilt Index – June 2036 and invests in central government securities with maturity aligned to June 2036. It is one of the longer-dated target maturity funds available in India, offering sovereign bond exposure over an extended investment horizon. 
• Bandhan CRISIL IBX Gilt April 2028 Index Fund: This fund tracks the CRISIL IBX Gilt April 2028 Index and is managed by Bandhan Mutual Fund. It invests in central government securities maturing around April 2028, offering a medium-term sovereign bond exposure. The fund provides investors with a defined maturity date and predictable return visibility at the time of investment, with no credit risk as the portfolio consists of G-secs.
• Axis CRISIL IBX SDL May 2027 Index Fund: Managed by Axis Mutual Fund, this fund tracks the CRISIL IBX SDL May 2027 Index and invests in state government bonds maturing in May 2027. It offers medium-term SDL exposure with a clear maturity horizon. 
• SBI CRISIL IBX SDL Index – Sep 2027 Fund: This fund tracks the CRISIL IBX SDL Index – Sep 2027 and is managed by SBI Mutual Fund. It invests in state development loans maturing around September 2027 and provides investors with a passively managed SDL portfolio with a defined end date. 
• HDFC Nifty SDL Oct 2026 Index Fund: Managed by HDFC Mutual Fund, this fund tracks the Nifty SDL Oct 2026 Index and invests in state development loans maturing in October 2026. It is among the shorter-dated funds in this list, making it appropriate for investors with a near-term fixed income horizon seeking SDL yields with low duration risk.
• Kotak Nifty SDL Apr 2027 Index Fund: This fund tracks the Nifty SDL Apr 2027 Index and is managed by Kotak Mutual Fund. It provides exposure to state government bonds maturing around April 2027. Kotak Mutual Fund’s debt fund management track record and index replication capabilities support the fund’s objective of closely matching the benchmark’s yield and performance.
• Nippon India Nifty AAA CPSE Bond Plus SDL – Apr 2027: This fund tracks the Nifty AAA CPSE Bond Plus SDL Apr 2027 Index and is managed by Nippon India Mutual Fund. It invests in a blend of AAA-rated Central Public Sector Enterprise bonds and state development loans, all maturing around April 2027. 
• ICICI Pru Nifty PSU Bond Plus SDL Sep 2027: Managed by ICICI Prudential Mutual Fund, this fund tracks an index comprising AAA-rated PSU bonds and SDLs maturing around September 2027. The blended structure provides investors with exposure to both public sector enterprise bonds and state government securities, offering a yield advantage over pure sovereign funds while retaining high credit quality. 
• Aditya Birla SL Nifty SDL Plus PSU Bond Sep 2027: Managed by Aditya Birla Sun Life Mutual Fund, this fund invests in a combination of SDLs and PSU bonds maturing around September 2027. The blended portfolio aims to capture the yield premium available from state government securities and public sector enterprise bonds while maintaining a high overall credit quality. 

Taxation on Target Maturity Funds

Target maturity funds are classified as debt mutual funds for tax purposes in India. Following the Finance Act 2023, the tax treatment of debt mutual funds was revised. The current taxation on target maturity funds is as follows:

Note: With effect from 1st April 2023, debt mutual funds, including target maturity funds, no longer enjoy the benefit of indexation for long-term capital gains. Both short-term and long-term capital gains are now taxed at the investor’s applicable income tax slab rate, irrespective of the holding period. Investors should verify the current tax treatment with a qualified tax advisor before investing.

How to Invest in Target Maturity Funds?

You can start investing in target maturity funds by following these steps:

• To invest in target maturity funds, you can visit a mutual fund investment platform such as smallcase
• The next step is to research and identify the target maturity fund that aligns with your investment thesis. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as yield to maturity, expense ratio, and fund size.
• Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose to invest as a one-time lump sum or set up a SIP, and complete the process.

Who Should Invest in Target Maturity Funds?

• Investors with a Defined Investment Horizon: Target maturity funds are most effective when the investor’s holding period aligns with the fund’s maturity date. Investors with a specific financial goal, such as retirement corpus building, children’s education, or a near-term large purchase, can use a target maturity fund whose maturity coincides with their goal date.
• Investors Seeking Predictable Fixed Income Returns: The roll-down structure of target maturity funds provides return visibility at the time of investment. Investors who want a broad sense of what returns they can expect if they hold until maturity may find target maturity funds more transparent than actively managed debt funds.
• Investors Wanting Low Credit Risk: Since target maturity funds invest only in G-secs, SDLs, and AAA-rated PSU or CPSE bonds, they carry negligible credit or default risk. Conservative fixed-income investors who prioritise capital preservation alongside reasonable returns may find these funds appropriate.

Benefits of Investing in Target Maturity Funds

• Return Predictability: Investors entering a target maturity fund can broadly estimate their returns based on the portfolio’s yield to maturity (YTM) at the time of investment, assuming they hold until the fund’s maturity date. This makes return planning more transparent compared to actively managed debt funds, where portfolio changes affect outcomes.
• High Credit Quality: Target maturity funds invest exclusively in sovereign bonds (G-secs), quasi-sovereign bonds (SDLs), and AAA-rated PSU or CPSE bonds. This restricts credit risk to negligible levels and makes them safer than most other debt fund categories that may include corporate bonds of varying credit quality.
• Declining Interest Rate Risk Over Time: The roll-down strategy means portfolio duration reduces as the fund approaches maturity. Investors who remain invested experience progressively lower sensitivity to interest rate movements, which reduces mark-to-market volatility in the later years of the fund’s tenure.
• Passive Management and Transparency: Target maturity funds track publicly available bond indices, making the portfolio composition and selection methodology transparent. Unlike actively managed debt funds, there is no fund manager risk associated with credit calls or duration bets that could materially alter portfolio risk.
• Variety Across Maturities and Bond Types: Indian investors have access to a range of target maturity funds covering different maturity dates from 2026 to 2036 and across G-sec, SDL, and blended PSU bond categories. This allows investors to build a fixed income ladder across multiple funds aligned to different goal dates.

Risks of Investing in Target Maturity Funds

• Interest Rate Risk for Early Exits: While the roll-down structure reduces interest rate risk for investors who hold until maturity, those who exit before the maturity date are exposed to mark-to-market losses if interest rates have risen since their entry. The longer the remaining duration at the time of exit, the greater the potential impact of interest rate movements on NAV.
• Reinvestment Risk: Coupon payments received from bonds in the portfolio are reinvested at prevailing rates. If interest rates decline significantly after the fund is launched, reinvested coupons may earn lower returns than the original portfolio YTM, causing actual realised returns to fall marginally below the initial yield estimate.
• Liquidity Risk in Underlying Bonds: Some SDL or CPSE bonds in the portfolio may have lower secondary market liquidity compared to central government securities. This can affect the fund’s ability to execute large transactions efficiently, particularly if there are significant inflows or outflows around rebalancing periods.
• No Capital Appreciation in Rising Rate Environments: In a rising interest rate environment, bond prices fall and the fund’s NAV may decline in the short term. Unlike equity funds, target maturity funds do not have the potential for capital appreciation beyond the accrual income from the bond portfolio.

Factors to Consider Before Investing in Target Maturity Funds

• Matching Maturity Date with Investment Horizon: The most critical factor is aligning the fund’s maturity date with your own investment timeline. Investing in a target maturity fund whose maturity date matches your financial goal ensures you benefit from the roll-down structure and minimises the risk of having to exit early due to a mismatch between your goal date and the fund’s maturity.
• Yield to Maturity (YTM) at Time of Entry: The portfolio YTM at the time of investment is a key indicator of the expected return if held until maturity. Compare the YTM across different target maturity funds and against alternative instruments such as FDs or other debt funds to assess whether the return adequately compensates for the investment horizon and any tax implications.
• Type of Underlying Bonds: G-sec funds carry sovereign credit risk with no default risk, SDL funds carry quasi-sovereign risk with marginally higher yields, and blended PSU or CPSE bond funds carry AAA credit risk with a slight additional yield premium. Investors should select the bond type based on their risk tolerance and yield preference.
• Expense Ratio: Since target maturity funds are passively managed, expense ratios should be low. Even a small difference in expense ratio compounds over the fund’s tenure and directly reduces the net return received by the investor. Comparing expense ratios across funds tracking the same or similar index is an important step.
• Interest Rate Outlook: Entering a target maturity fund when interest rates are at elevated levels locks in higher yields for the investment horizon. Conversely, entering when rates are low may result in lower returns. While timing the rate cycle precisely is difficult, understanding the broad interest rate environment at the time of investment is a useful context.

To Wrap It Up…

Target maturity funds offer Indian fixed income investors a structured, transparent, and passively managed route to earning predictable returns from high-quality government and quasi-government bonds. Understanding what target maturity funds are and how their roll-down structure works is important for investors considering this category. They are particularly suited to investors who can align their investment horizon with the fund’s maturity date, as this minimises interest rate risk and enables them to benefit fully from the portfolio’s yield at entry.

However, the removal of indexation benefit in 2023 has reduced the tax advantage of these funds over FDs, and investors should evaluate post-tax returns carefully. Interest rate risk for early exits, reinvestment risk, and tracking error are additional considerations.

To analyse target maturity funds in detail, use the Tickertape Mutual Fund Screener, which provides 50+ filters. You can compare funds based on yield to maturity, expense ratio, AUM, fund category, and performance consistency using pre-built filters for structured evaluation.on.

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Frequently Asked Questions on Target Maturity Funds