NFO Alert: SBI Mutual Fund launches SBI Nifty50 Equal Weight Index Fund; everything you need to know

SBI Mutual Fund announced the launch of the SBI Nifty50 Equal Weight Index Fund, an open-ended index fund scheme that seeks to generate returns that, before expenses, corresponds to the total return of the securities as represented by the underlying index - the NIFTY50 Equal Weight index, subject to tracking error.

The scheme opened for public subscription on January 16, 2024, and will close on January 29, 2024. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

What kind of a mutual fund scheme is this?

This is an open-ended index fund replicating/ tracking the NIFTY50 Equal Weight index.

What is the main objective of investing in this fund?

The investment objective of the scheme is to provide returns that correspond to the total returns of the securities as represented by the underlying index, subject to tracking errors. However, there is no guarantee or assurance 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, Kotak Mahindra Mutual Fund House and UTI Mutual Fund have launched similar funds. These include:

How will the scheme benchmark its performance?

The scheme primarily invests in securities that are constituents of the Nifty50 Equal Weight index. Thus, the composition of the aforesaid benchmark is such that it is most suited for comparing the performance of the scheme. The benchmark of the scheme is a Total Return Index.

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” will be charged as:

•           For exit on or before 15 days from the date of allotment – 0.25%

•           For exit after 15 days from the date of allotment – Nil

Who will manage this scheme?

Viral Chhadva is the dedicated fund manager of the SBI Nifty50 Equal Weight Index Fund.

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.