Two fund houses of SBI and Axis have filed papers with market regulator Sebi to start mutual fund schemes linked to inflation-indexed bonds.
The money collected from investors by these MFs would be invested in government's inflation indexed securities. These open-ended debt funds aim to provide inflation—adjusted returns to investors.
Deutsche Asset Management India last month became the first fund house to launch an inflation-indexed fund.
SBI Mutual Fund and Axis Mutual Fund expect to allocate a minimum of 70 per cent and 65 per cent towards inflation- linked bonds respectively, according to documents filed with the Securities and Exchange Board of India.
However, details about amount to be raised and launch date were not mentioned.
"The investment objective of the scheme is to generate capital appreciation and income through investment in inflation indexed bonds," as per documents.
The Reserve Bank of India (RBI) had in May announced launching inflation-linked bonds every month, as part of its efforts to discourage investments in gold.
The bonds are expected to attract household savings of up to Rs 15,000 crore in the current financial year.