Aditya Birla Sun Life Mutual Fund announced the launch of the Aditya Birla Sun Life CRISIL Overnight Fund AI Index ETF, an open-ended income scheme investing in the CRISIL Overnight Fund AI Index constituents. The scheme opened for public subscription on March 03, 2023, and will close on March 10, 2023.
Q. What kind of mutual fund scheme is this?
This kind of open-ended Exchange Traded Fund (ETF) aims to generate returns commensurate with the performance of the Aditya Birla Sun Life CRISIL Overnight Fund AI Index ETF. This is a relatively low-interest rate risk and relatively low credit risk scheme. However, there is no assurance that the scheme’s investment objective will be realized.
Q. What is the main objective of investing in this fund?
The investment objective of the Scheme is to generate returns corresponding to the total returns of the securities as represented by the CRISIL Overnight Fund AI Index before expenses, subject to tracking errors.
Q. How may one invest in this fund?
Investors can invest under the scheme with a minimum investment of ₹5,000. The scheme shall have only one plan and only one option which shall be daily Income Distribution cum Capital Withdrawal (IDCW) reinvestment with a compulsory weekly payout of the reinvested units.
Under normal circumstances, the asset allocation of the Scheme will be as follows:
| Instruments | Allocation (% of total Assets) | Risk Profile | |
| Minimum | Maximum | ||
| Instruments comprising CRISIL Overnight Fund AI Index | 95% | 100% | Low |
| Cash and Money Market instruments | 0% | 5% | Low |
| Source: Scheme Information Document | |||
Q. Are there similar mutual funds in the market?
To date, Mirae Asset Mutual Fund launched the Mirae Asset Global X Artificial Intelligence & Technology ETF Fund of Fund that invests in units of Global X Artificial Intelligence & Technology ETF.
Q. How will the scheme benchmark its performance?
The series under the scheme intends to have similar instruments as constituted in the CRISIL Overnight Fund AI Index. Using this benchmark shall provide the investor with an independent and representative comparison with the fund portfolio. The scheme being a passive investment carries lesser risk as compared to active fund management. The portfolio would follow the index and therefore the level of constituent concentration in the portfolio and its volatility would be the same as that of the index, subject to tracking errors. Thus, there would be no additional element of volatility or concentration on account of fund manager decisions.
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” is also “Zero”.
Q. Who will manage this scheme?
Sanjay Pawar and Sunaina da Cunha would be the designated fund managers of the 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. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
