HDFC Mutual Fund launched the new fund offers (NFOs) of two of its mutual fund schemes on July 25 namely Nifty 100 ETF and Next 50 ETF. As it is evident, they are passively-managed schemes. The fund will remain open for subscription until August 1.
During NFO period, investors can invest ₹500 per subscription application and in multiples of Re 1 thereafter. After the NFO period, investors will be able to buy and sell ETF units during the trading hours on all trading days on NSE and/or BSE where the units will get listed.
Under normal circumstances, the asset allocation of the scheme will include anywhere between 95 to 100 percent allocation to securities covered by the underlying index, and the remaining 0-5 percent will be allocated to debt and money market instruments.
The schemes will be managed by fund managers Krishan Kumar Daga and Arun Agarwal.
HDFC Nifty Next 50 ETF: This scheme is meant to provide investment returns which closely correspond to the total returns of the securities as represented by the NIFTY Next 50 Index, subject to tracking errors. This fund offers benefit of diversification at stock and sector level.
There will be potential for competitive risk adjusted returns in comparison to NIFTY 50 in the long term. It offers higher potential for growth with next league of probable NIFTY 50. The scheme will complement NIFTY 50 effectively.
The trailing P/E ratio of Nifty Next 50 TRI is 18.32 and the trailing P/B ratio of Nifty Next 50 TRI is 3.88.
New fund offer: Key details
| Scheme opened | July 25 |
| To close on | August 1 |
| Minimum subscription | ₹500 and in multiples of Re 1 thereafter |
| Allocation to equity | 95-100 percent |
| Allocation to debt & money market | 0-5 percent |
HDFC Nifty 100 ETF: This scheme is meant to provide investment returns that closely correspond to the total returns of the securities as represented by the NIFTY 100 Index, subject to tracking errors.
This fund will give an exposure to top 100 companies based on full market capitalisation giving better market representation.
This is a more balanced sectoral diversification than NIFTY 50 Index. It tracks the behaviour of the combined portfolio of NIFTY 50 and NIFTY Next 50. The fund house claims that investing in Nifty 100 is a simple way to gain exposure to the Indian large cap space. The trailing P/E ratio of Nifty 100 TRI is 19.54 and trailing P/B ratio is 4.05.
