Bandhan Mutual Fund announced the launch of the Bandhan Nifty IT Index Fund, an open-ended index scheme best suited to investors seeking long-term wealth creation. This fund seeks to track returns by investing in a basket of Nifty IT TRI stocks and aims to achieve returns of the stated index, subject to tracking error.
The scheme opened for public subscription on August 18, 2023, and will close on August 28, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
What kind of mutual fund scheme is this?
This is an open-ended index fund scheme tracking the NIFTY IT Index.
What is the main objective of investing in this fund?
The investment objective of the scheme is to replicate the Nifty IT Index by investing in securities of the Nifty IT Index in the same proportion/weightage with an aim to provide returns before expenses that track the total return of the Nifty IT Index, subject to tracking errors. However, there is no assurance or guarantee that the objectives of the scheme will be realized and the scheme does not assure or guarantee any returns.
How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹1000 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:
| Instruments | Indicative allocations (% of total assets) | Risk Profile | |
Minimum | Maximum | ||
Securities belonging to the Nifty IT Index | 95% | 100% | Very High |
Debt & Money Market Instruments | 0% | 5% | Low to Moderate |
Are there similar mutual funds in the market?
To date, only ICICI Prudential Mutual Fund and Axis Mutual Fund have launched such similar IT index fund schemes, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index.
How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked againstNifty IT TRI.As the scheme primarily invests in constituents of Nifty IT TRI and the investment objective is to generate returns in a portfolio of equity shares in the same proportion as the benchmark index, the Scheme will be benchmarked against the Nifty IT TRI.
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 also be “Nil”.
Who will manage this scheme?
Nemish Sheth is the designated fund manager of this scheme.
Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in theScheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
