NFO Alert: Mirae Asset Mutual Fund launches the Nifty 1D Rate Liquid ETF; all you need to know

Mirae Asset Mutual Fund announced the launch of the Mirae Asset Nifty 1D Rate Liquid ETF, an open-ended listed liquid scheme in the form of an exchange-traded fund (ETF) tracking the Nifty 1D Rate Index, with daily income distribution cum capital withdrawal (IDCW) and compulsory reinvestment of IDCW option.

The scheme opened for public subscription on July 24, 2023, and will close on July 26, 2023. The scheme re-opens for continuous sale and repurchase from July 28, 2023.

Q. What kind of mutual fund scheme is this?

This is an open-ended listed liquid scheme in the form of an ETF tracking the Nifty 1D Rate Index, with daily IDCW and compulsory reinvestment of the IDCW option.

Q. What is the main objective of investing in this fund?

The investment objective is to seek to provide current income, commensurate with low risk while providing a high level of liquidity through a portfolio of Tri-Party Repo on G-Sec or T-bills/Repo & Reverse Repo. The scheme endeavours to provide returns that before expenses, closely correspond to the returns of the Nifty 1D Rate subject to tracking errors. However, there is no assurance that the investment objective of the Scheme will be realized and the scheme does not assure or guarantee any return.

Q. How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹5000 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:

Q. Are there similar mutual funds in the market?

To date, no asset management company (AMC) has launched any such fund pertaining to the aforementioned scheme.

Q. How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked to the performance of the Nifty 1D Rate Index. The trustees have adopted Nifty 1D Rate Index as the benchmark index. As per its investment objective, the investment would primarily be in securities that 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.

Q. 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 makers/large investors directly with the AMC.

For investors transacting on the exchange: Not Applicable.

Q. Who will manage this scheme?

Amit Modani is the designated fund manager of this scheme.

Q. Does the fund contain any inherent risk?

The scheme involves “Low 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 low risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.