Aditya Birla Sun Life launched a new fund offer for its Nifty 200 Quality 30 ETF. The NFO opened on July 29 and will close on August 10. The mutual fund aims to target sustainable earnings, profitability and solvency. In other words, the fund enables investors to access consistently profitable companies with less leverage to investors.
We share more details about this new fund scheme:
About the index:
The fund house will choose top 30 companies from its parent Nifty 200 index, selected based on their quality scores. The index is rebalanced semi-annually - June and December.
The quality score for each company will be determined based on equal weightage to return on equity, financial leverage (debt/equity ratio) and earnings (EPS) growth variability analysed during the previous 5 years. Each stock in the index is capped at the lower of 5 percent or 5 times the weight of the stock in the index based only on free flat market capitalisation.
| Name | Details |
| NFO launched | July 29 |
| NFO to close | Aug 10 |
| Index | Top 30 from Nifty 200 index based on quality scores |
| Minimum investment | ₹1,000 |
(Source: mutualfund.adityabirlacapital.com)
Why to invest?
While giving the rationale to invest in the fund, the AMC says that the form is temporary while the class is permanent.
There will be investors' focus on defensive healthy companies across market cycles. There is likely to be a strong performance of the underlying index and it is predominantly large cap-oriented.
Asset allocation
As far as asset allocation is concerned, there will be 95 to 100 percent allocation to equity and equity related instruments constituting Nifty 200 Quality 30 TRI, while the remaining 0 to 5 percent to cash, money market and debt instruments.
Fund managers of the scheme are Lovelish Solanki and Pranav Gupta. To invest, investors must invest a minimum of ₹1000 and in multiples of Re 1 thereafter during the new fund offer period. The units being offered will have a face value of Re 1 each and will be issued at a premium.
And the product is suitable to investors who are seeking returns that are in line with the performance of Nifty 200 Quality 30 index, subject to tracking errors.
