NFO Alert: Groww Mutual Fund launches Groww Nifty Non-Cyclical Consumer Index Fund; all you need to know

Groww Mutual Fund announced the launch of the Groww Nifty Non-Cyclical Consumer Index Fund. The scheme opened for public subscription on May 02, 2024, and will close on May 16, 2024.

Abeer Ray
First Published4 May 2024
Groww Mutual Fund launches Groww Nifty Non-Cyclical Consumer Index Fund as a part of its new fund offers.
Groww Mutual Fund launches Groww Nifty Non-Cyclical Consumer Index Fund as a part of its new fund offers.

Groww Mutual Fund announced the launch of the Groww Nifty Non-Cyclical Consumer Index Fund, an open-ended equity scheme tracking the Nifty Non-Cyclical Consumer Index – TRI. 

The scheme opened for public subscription on May 02, 2024, and will close on May 16, 2024. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme following a non-cyclical consumer theme.

What is the main objective of investing in this fund?

The investment objective of the scheme is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies with a focus on non-cyclical consumer themes.

Commenting on the launch, Harsh Jain, Co-founder and COO, Groww said, "The Groww Nifty Non-Cyclical Index fund is India’s first index fund, which enables people to invest in the top stocks from consumer industries such as FMCG, Textiles, etc., These companies manufacture items we need in our daily lives and tend to be slightly more insulated from economic cycles and therefore are seen as non-cyclical sectors.”

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of  500 per plan/ option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation (% of net assets) of the scheme’s portfolio will be as follows:

Debt and Money Market Instruments: The scheme will invest in debt and money market instruments. It retains the flexibility to invest across all the securities in the debt and money markets. Debt securities and money market instruments will include but will not be limited to:

A. Securities created and issued by the central and state governments as may be permitted by RBI (including but not limited to coupon-bearing bonds, zero-coupon bonds, and treasury bills).

B. Securities guaranteed by the central and state governments (including but not limited to coupon bearing bonds, zero coupon bonds, and treasury bills).

C. Debt securities of domestic government agencies and statutory bodies, which may or may not carry a Central/State Government guarantee.

D. Corporate debt (of both public and private sector undertakings). Money market instruments permitted by SEBI/RBI or in alternative investment for the call money market that may be provided by the RBI to meet the liquidity requirements.

E. Certificate of Deposits (CDs).

F. Commercial Paper (CPs). A part of the net assets may be invested in the Collateralized Borrowing & Lending Obligations (CBLO) or an alternative investment as may be provided by RBI to meet the liquidity requirements.

G. The non-convertible part of convertible securities.

H. Any other domestic fixed-income securities as permitted by SEBI / RBI from time to time subject to necessary approvals from SEBI, if any.

I. Any other instruments/securities, which in the opinion of the fund manager would suit the investment objective of the scheme subject to compliance with extant regulations.

Investment in Derivatives: The scheme may take derivatives positions based on the opportunities available subject to the guidelines provided by SEBI from time to time and in line with the overall investment objective of the Scheme. Derivatives can be traded over the exchange or can be structured between two counterparties. Those transacted over the exchange are called Exchange-Traded derivatives whereas the other category is referred to as Over the Counter (OTC) derivatives.

Options: An option is a contract that provides the buyer of the option (also called the holder) the right, without the obligation, to buy or sell a specified asset at an agreed price on or up to a particular date. To acquire this right, the buyer has to pay a premium to the seller. The seller on the other hand will buy or sell that specified asset at the agreed price. 

The premium is determined by considering myriad factors such as the underlying asset's market price, the number of days to expiration, the strike price of the option, the volatility of the underlying asset, and the riskless rate of return. The strike price, the expiration date, and the market lots are specified by the exchanges. An option contract may be of two kinds, viz., a call option or a put option. 

An option that provides the buyer the right to buy is a call option. The buyer of the call option (known as the holder of the option) can call upon the seller of the option (known as the writer of the option) and buy from him the underlying asset at the agreed price at any time on or before the expiry date of the option. The seller of the option has to fulfill the obligation on the exercise of the option. The right to sell is called a put option. 

Here, the buyer of the option can exercise his right to sell the underlying asset to the seller of the option at the agreed price. Options are of two types: European and American. In a European option, the holder of the option can only exercise his right on the date of expiration. In an American option, he can exercise this right anytime between the purchase date and the expiration date.

Index Future: The mutual fund’s position limit in all index futures contracts on a particular underlying index shall be as per the regulations. This limit would be applicable on open positions in all futures contracts on a particular underlying index.

Are there similar mutual funds in the market?

To date, no asset management company (AMC) has launched any such fund in the past.

How will the scheme benchmark its performance?

The performance of the scheme shall be benchmarked to Nifty Non-Cyclical Consumer Index Fund –TRI. Since the scheme is an index fund, the compositions are such that it is most suited for comparing the performance of the scheme.

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:

- In respect of each purchase/switch-in of units, an Exit load of 1% is payable if units are redeemed/switched out within 30 days from the date of allotment.

- No Exit Load is payable if units are redeemed/ switched out after 30 days from the date of allotment.

Who will manage this scheme?

Abhishek Jain is the designated fund manager 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 only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

 

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HomeMutual FundsNFO Alert: Groww Mutual Fund launches Groww Nifty Non-Cyclical Consumer Index Fund; all you need to know

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