Home / Mutual Funds / News /  HDFC MF filed draft SID for Emerging Market Index FoF
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HDFC Mutual Fund filed draft scheme information document (SID) for MSCI Emerging Markets Index Fund of Funds. It comes under the category of overseas fund of funds. The scheme is an open-ended fund of funds scheme investing in units/shares of overseas Index Funds and/or ETFs which track the MSCI Emerging Markets Index.

The scheme will be benchmarked against MSCI Emerging Markets Index (Net Total Return Index).

EM countries include - Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

The MSCI Emerging Markets Index captures large and midcap representation across 27 Emerging Markets (EM) countries. With 1,418 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country, as per the SID.

The Index is rebalanced on a quarterly basis and may also be rebalanced at other times.

The minimum application amount during the NFO period and post that is 5,000. For the additional purchase after the scheme re-opens, the minimum application amount is 1,000.

Note that, investing in emerging markets may carry a higher risk than investing in developed markets.

Also, as the Underlying Scheme(s) will invest in securities which are denominated in foreign currencies, fluctuations in the exchange rates of these foreign currencies may have an impact on the income and value of the underlying scheme(s). Thus, returns to investors are the result of a combination of returns from investments and from movements in exchange rates

The fund will be managed by Krishan Kumar Daga.

In terms of taxation, the sale of the units will be treated as capital gains. In case of long-term gains – where the period of holding is more than 36 months – the gains will e taxed at 20 per cent with indexation benefit. The short-term gains, on the other hand, will be taxed at the applicable slab rate for the unitholder.

On the outlook front, Sandeep Bhardwaj, CEO, Retail, IIFL Securities said "the share of emerging markets in global economy has increased significantly. They will continue to grow at a faster rate due to higher demand, demographics and continued development on a lower base backed by digital transformation."

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