NFO Alert: HDFC Mutual Fund launches Multi Cap 50:25:25 Index Fund. Should you invest?

HDFC Mutual Fund has launched NIFTY500 Multicap 50:25:25 Index Fund which was opened for subscription on August 6 and will remain open till August 20. There are options of regular and direct plans with each plan offering growth options only.

This index comprises all companies that are part of Nifty500 index with allocations to large cap, mid cap and small cap in the ratio of 50 per cent, 25 per cent and 25 percent, respectively.

The scheme document shows that there will be a minimum of 95 percent allocation to securities covered by Nifty500 multi-cap 50:25:25 index and up to 5 percent to debt securities and money market instruments. The weight rebalancing is done every quarter i.e., March, June, September and December.

Top five constituents of this index are HDFC Bank, Reliance Industries, ICICI Bank, Infosys and Larsen & Toubro (L&T). Let us understand more about this new fund offer (NFO) in the FAQs listed below:

What kind of mutual fund scheme is this?

This is an index scheme which will invest in the stocks which are part of Nifty500 multi cap 50:25:25 index.

What is the main objective of investing in this fund?

This mutual fund scheme is suitable for investors who want exposure to the broad market, but with higher weight to midcaps and small-caps than currently provided by the Nifty 500 Index.

How may one invest in this scheme?

One can invest a minimum of ₹100 in this scheme, and an additional purchase of any amount thereafter. Allotment of units is done after deducting applicable stamp duty and transaction charges, if any.

Are there similar mutual funds in the market?

It is an index mutual fund scheme and there are similar mutual fund schemes also such as Navi Nifty500 Multicap 50:25:25.

How will the scheme benchmark its performance?

The scheme’s performance will be benchmarked against Nifty500 Multicap 50:25:25 Index.

Are there any entry or exit loads to this scheme?

There will be no exit load. The AMC will levy no exit load on bonus units and on units allotted on reinvestment of IDCW. In respect of systematic transactions such as SIP, STPs, exit load, if any, prevailing on the date of registration / enrolment will be levied.

Who will manage this scheme?

The fund will be managed by Nirman Morakhiaand co-managed by Arun Agarwal.

Does the fund contain any inherent risk?

As per the risk-o-metre, the scheme has a very high risk which implies that investors must be aware that their principal will be at very high risk. The investors who want to know more about this new fund offer can visit this link:

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.