HDFC AMC has recently launched new fund offers (NFOs) for three ETFs: Nifty100 Quality30ETF, Nifty50Value20ETF and Nifty Growth Sectors 15ETF to expand their suite of HDFC MF Index Solutions.
The fund managers for these schemes will be Krishan Kumar Daga and Arun Agarwal and during the NFO period, investors can invest a minimum of ₹500 per application and in multiples of Re one thereafter.
These schemes fall under smart beta investing category which involves stock selection and weighting that is done based on pre-defined factors as defined in the underlying index methodology by NSE Indices.
What is smart beta investing?
Smart beta investing is passively managed. The stock selection and weighting are based on pre-defined factors as defined in the underlying index methodology by NSE. The factors that are used to select the stocks include quality, value and growth.
The three beta ETFs will give exposure to quality, value and growth factors.
The fund houses choose beta investing because it is backed by extensive empirical research, and stock selection and weighting is based on factors instead of market cap.
| Particular | Details |
| NFO Period | Sept 9-20 |
| Min investment | ₹500 |
| Factors involved | Quality (Nifty100 Quality30ETF), Value (Nifty50Value20ETF) and growth (Nifty Growth Sectors 15ETF) |
| Fund managers | Krishan Kumar Daga and Arun Agarwal |
“Smart Beta investing is popular globally with AUM rising steadily. HDFC AMC is happy to expand index solution offerings for investors that are backed by empirical research. Smart Beta ETFs offer one-shot diversification of portfolio at a low cost, and is proven tool for investors who seek returns over the long-term,” said Navneet Munot, MD and CEO of HDFC Asset Management.
Here we briefly explain a little bit about each of the three ETFs:
HDFC Nifty 100 Quality 30 ETF: This is meant for investors who want returns that are commensurate with the performance of the NIFTY100 Quality 30 Index (TRI).It will select stocks that have high efficiency, low financial leverage and stable earnings.
HDFC Nifty 50 Value 20 ETF: This is meant for investors who want returns that are commensurate with the performance of the NIFTY50 Value 20 Index (TRI). It will select stocks based on their price/earnings, price/book, dividend yield and return on capital employed.
HDFC Nifty Growth Sectors 15 ETF: This is meant for returns that are commensurate with the performance of the NIFTY Growth Sectors 15 Index (TRI). It will select stocks from sectors with high price/earnings and price/ book ratios which reflect high earnings growth potential.
