HDFC Mutual Fund announced the launch of HDFC Technology Fund, an open-ended equity scheme investing in technology and technology-related companies.
The scheme opened for public subscription on August 25, 2023, and will close on September 05, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
Q. What kind of mutual fund scheme is this?
This is an open-ended equity fund scheme investing in technology and technology-related companies. This product is suitable for investors seeking:
- To generate long-term capital appreciation
- Investment predominantly in equity and equity-related instruments of technology and technology-related companies.
Q. What is the main objective of investing in this fund?
The scheme seeks to provide long-term capital appreciation by investing predominantly in equity and equity-related securities of technology and technology-related companies. There is no assurance that the investment objective of the scheme will be realised.
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹100 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 | ||
Equity and equity-related instruments of Technology and technology-related companies | 80% | 100% | Very High |
Equity and equity-related instruments of companies other than the above | 0% | 20% | Very High |
Units of REITs and InvITs | 0% | 10% | Medium to High |
Debt securities, money market instruments, and fixed-income derivatives | 0% | 20% | Low to Medium |
Units of Mutual Fund | 0% | 5% | Low to High |
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such technology-themed funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. Some of these include:
Mutual Fund House | Name of the Scheme |
Franklin Templeton India Mutual Fund | Franklin India Technology Fund |
SBI Mutual Fund | SBI Technology Opportunities Fund |
ICICI Prudential Mutual Fund | ICICI Prudential Technology Fund |
Quant Mutual Fund | Quant Teck Fund |
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against the S&P BSE Teck Index. As the scheme proposes to invest predominantly in technology & and technology-related companies, the benchmark would be appropriate to compare the performance of the scheme.
The Trustee reserves the right to change the benchmark for evaluation of the performance of the scheme from time to time in conformity with the investment objectives and appropriateness of the benchmark subject to SEBI (MF) Regulations, and other prevailing guidelines, if any by suitable notification to the investors to this effect.
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” would be calculated as under:
-With respect to each purchase/switch-in of units, an Exit load of 1% is payable if units are redeemed/switched out within 1 year from the date of allotment.
- No Exit Load is payable if units are redeemed/switched out after one year from the date of allotment.
Q. Who will manage this scheme?
Balakumar B and Dhruv Muchhal are the designated fund managers of this scheme.
Q. Does the fund contain any inherent risk?
The scheme involves “Very High 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 very high risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
