NFO Alert: All you need to know about Mirae Asset Nifty Smallcap 250 Momentum Quality 100 ETF

Mirae Asset Mutual Fund announced the launch of the Mirae Asset Nifty Smallcap 250 Momentum Quality 100 ETF, an open-ended scheme replicating/tracking the Nifty Smallcap 250 Momentum Quality 100 Total Return Index.

The scheme opened for public subscription on February 12, 2024, and will close on February 21, 2024. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment on NSE and BSE.

What kind of mutual fund scheme is this?

This is an open-ended exchange-traded fund scheme replicating/tracking the Nifty Smallcap 250 Momentum Quality 100 Total Return Index.

Speaking on the NFO launch, Siddharth Srivastava, Head – ETF Product and Fund Manager, Mirae Asset Mutual Fund, said, “By focusing on three tried and tested pillars of Liquidity, Quality, and Momentum (LQM), this is a first-of-its-kind multi-factor product in the smallcap segment, which will seek to track a robust portfolio of select 100 smallcap stocks from Nifty Smallcap 250 Index, with an endeavour for potentially lower drawdowns. At current market valuations, the investor may invest in a lumpsum manner or through a Systematic Investment Plan (SIP), but with a long-term investment horizon.”

What is the main objective of investing in this fund?

The investment objective of the scheme is to generate returns, before expenses, that are commensurate with the performance of the Nifty Smallcap 250 Momentum Quality 100 Total Return Index, subject to tracking error. There is no assurance or guarantee that the investment objective of the scheme will be achieved.

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹5,000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Are there similar mutual funds in the market?

To date, no asset management company (AMC) has launched any such exchange-traded fund (ETF).

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked to the performance of the Nifty Smallcap 250 Momentum Quality 100 Total Return Index. As per its investment objective, the investment would primarily be in securities which are constituents of the benchmark index. Thus, the composition of the aforesaid benchmark index is such that it is most suited for comparing the performance of the scheme. The index is designed to reflect the performance of the top 100 companies within the Nifty Smallcap 250 universe based on the combination of momentum and quality scores.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would be calculated as under:

• For investors transacting directly with the AMC: No exit load will be levied on redemptions made by Market Maker / Large Investors directly with the AMC.
• For investors transacting on the exchange: Not Applicable.

Who will manage this scheme?

Ekta Gala and Vishal Singh are the designated fund managers of this scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.